Close this search box.

Joules sales grow online and in-store – but rising costs mean profits disappoint

Image courtesy of Joules

Joules today reports fast sales growth online and in-store in a half-year that saw customers flocked to buy the homewares and lifestyle products that it sells. But rising costs – from the cost of digital marketing to wage rises, distribution skills shortages, and Brexit tariffs – all meant “disappointing” profits.

By the end of the half-year, Joules had 1.9m active customers – up by 160,000 on the previous year, won online and as its stores reopened. But the cost of winning customers rose at the same time. The retailer is now bringing its customer data back in-house so that it can better understand how its shoppers want to buy, while offering increased personalisation and showing customers more relevant products. That in turn is expected to lead to more full price sales.

“Notwithstanding the disappointing profit outcome in the period, we remain encouraged by the strong levels of customer demand, the appeal of our core Joules brand, and the good levels of revenue growth and as a result remain very confident in the group’s long-term growth strategy,” the company said in today’s half-year statement.

Growing sales

Joules, ranked Top150 in RXUK Top500 research, today reported group revenue of £127.9m in the 26 weeks to November 28 2021. That’s 35% up on the same period in the previous year, and 15% ahead of the same period in pre-pandemic 2019.

Ecommerce sales – both via its Joules’ own website and through third-party ecommerce partners – were 14% up on last time and 53% up on two years earlier. That sales growth was driven, says Joules, by its February 2021 acquisition of The Garden Trading Company and by strong performance through its digital partners. Some 63% of sales were online, following the Garden Trading acquisition.

Meanwhile, in-store sales of Joules products came to £35.5m – 80% up on last year’s £19.7m. Store footfall was lower than pre-pandemic, but offset by high conversion rates and full-price sales.

Garden Trading sales grew 4% on the previous year, and 77% on two years earlier, while the Friends of Joules online marketplace, which now sells more than 20,000 complementary products from 500 sellers in the home, outdoor and garden, gifting, pets and clothing categories – saw revenues grow by 69% in the half-year. Sales also grew through its partnerships with third-party retailers including Next and Zalando. Joules will move from a wholesale relationship with Marks & Spencer to a commission-based model from this month. At the same time, it has served notice on its concessions in branches of John Lewis.

Rising costs hit profits

At the top-line, pre-tax profits before one-off costs came in at £2.6m. That’s lower than both the previous year (-£1.1m) and the year before that (-£5.8m). But after one-off costs, bottom line pre-tax profits of £2.6m were £1.3m higher than last time, and £0.9m higher than two years ago.

Gross margins increased by 0.2 percentage points to 50.4m (from 50.2%) as more sales were made at full price – but were offset by “significant increases to freight costs and outbound Brexit duties and taxes”. And operating expenses grew by 52.6% to £52.2m as wages and digital marketing costs rose rose at the same time as government support from the prior year had come to an end.

Joules chief executive Nick Jones says: “Whilst the group experienced strong levels of customer demand that resulted in good revenue growth against the prior two comparative periods, group profitability in the first half was impacted by various factors, most notably the severe inflationary cost environment. We have a clear plan of action to simplify the business, enhance efficiencies and mitigate the cost pressures that will enable the group to convert the strong levels of customer demand into sustainable, profitable growth.

“Whilst we acknowledge that there are areas within the business where we need to simplify our operations and improve profitability, we remain very excited in our long-term growth prospects. We have continued to see improvements in brand awareness and customer numbers, and we are confident that our broadened lifestyle proposition – which benefits from increased product and category diversification through Friends of Joules and Garden Trading – is more relevant than ever to consumers.”

Supply chain issues

This year’s profits were lower than Joules had expected as global supply chain issues meant stock was delayed in arriving at both Joules and Garden Trading and as Brexit-related duties and taxes hit its EU business, leading it to refocus its EU growth strategy for the future. In addition, local labour shortages affected both the productivity and costs of its third-party operated distribution centre, as wages rose and staff turnover was higher than expected. That had a knock on effect on the taken to service customer orders, requiring more temporary staff to be brought in from further afield for the peak trading season in order to ensure customer orders were fulfilled before Christmas.

Joules says it was “well prepared” for the extra operational and administrative requirements that came into force when the UK’s transitional arrangement with the EU ended on January 1 2021. But it says: “Notwithstanding this preparation, the group’s sales to EU customers, wholesale and consumers were impacted by logistics disruption and higher costs to serve. Disruption related to Brexit has been minimal in the period but higher costs to service customers and increased administrative expenses remain.”

The retailer is now focusing on profitable partnerships, and simplifying its distribution channels. It is ending its arrangements with stockists and EU sales agents that did not meet profitability criteria, and is reducing by about a quarter the options available in its USA wholesale product ranges. Minimum wholesale order values have been increased across all markets as Joules looks to improve profitability and efficiency.


Joules’ Responsibly Joules strategy aims to increase the proportion of sustainable materials used in its collections, in areas including cotton, leather, rubber and denim, while making its packaging more sustainable. In the first half of its financial year, it says, its clothing contained “more sustainable materials than ever seen in a Joules range”. The retailer is now a full member of the Ethical Trading Initiative and has signed up to the BRC Climate Action Roadmap, while launching TrusTrace to increase the transparency and traceability of its supply chain. It says 88% of its tier one suppliers are currently on the system, a proportion that it expects to reach 100% by the end of the current financial year.

Joules sells to 1.9m active customers online, through its own websites, those of third-party partners and through marketplaces, through 135 shops – up from 128 a year earlier – and through wholesale, in the UK and internationally.

Read More

Register for Newsletter

Group 4 Copy 3Created with Sketch.

Receive 3 newsletters per week

Group 3Created with Sketch.

Gain access to all Top500 research

Group 4Created with Sketch.

Personalise your experience on