Business

Joules warns it could lose up to £18 million due to lockdown



Joules has warned the new national lockdown could see it lose between £14 million and £18 million – if the restrictions continue until 1 April.

The clothing retailer said the closure of its stores, the cancellation of country shows and disruption to wholesale partners such as John Lewis, would have a big impact on its finances this year.

Joules has seven stores across Scotland.

But the business did say that new retail restrictions would be partially mitigated in the full financial year to 30 May 2021 due to better than expected sales and profits in past seven months, continued strong momentum of its digital platforms and cost reduction measures.

A trading updated noted that a strong balance sheet would enable it to “navigate the current climate and emerge in a strong position”.

Sales through its websites were up 66% year-on-year since late November, while in-store sales were down 58%.

Even when stores were trading, revenue was 23% lower when compared to the corresponding period last year – and had been particularly down over the last two weeks.

As of 3 January, the group had net cash of £13 million and total liquidity headroom of £63m.

Chief executive Nick Jones said: “While the latest round of restrictions on store retail across the UK present a further challenge for the retail sector as we enter 2021, we remain very confident that Joules, as a highly relevant, digital-led brand with an engaged and growing customer base and healthy balance sheet, is well positioned to navigate these challenges.”

Elsewhere, Sainsbury’s said recent lockdowns and Covid-19 tier restrictions helped sales soar, meaning profits for the year are now likely to be £50m higher than first thought.

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Sales in the three months to 2 January were up 8.6% on a like-for-like basis.

Over the Christmas period itself – measured by Sainsbury’s as the nine weeks to the same date – these were even higher, growing 9.3%.

Argos sales rose 8.4% and non-food sales were up 6%, as non-essential retailers were forced to either close stores or only offer click and collect services.

Online grocery sales soared 128% over the period, with total digital sales up 81%, now representing 44% of total sales for the group.

Around 1.1 million online food orders were delivered in the 10 days leading up to Christmas, the grocer added.

As a result, underlying pre-tax profits for the year are expected to hit £330m, compared with previous guidance of £270m – although this will be down on the £586m recorded last year, due to Sainsbury’s agreeing to repay its £410m business rates bill.

Chief executive Simon Roberts said the tighter Christmas restrictions saw customers turn to smaller turkeys and an increase in lamb and beef sales, but shoppers treated themselves to more premium products.

“Premium champagne sales were up 52%, Taste The Difference party food was popular throughout December, and people did more home baking than usual, with mincemeat sales up 24%.”

Meanwhile, B&M will reward 30,000 staff with an extra week’s wages, while shareholders are to receive a special dividend of £200m, after revenues at its UK stores increased again.

The discount retail giant said UK stores’ revenue growth for the festive ‘golden quarter’ was 26.6%, while group revenue growth stood at 22.5%.

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That’s compared with a 9.9% rise for the same period last year.

The group opened 18 new stores during the quarter – creating more than 500 new jobs.

B&M has 75 stores across Scotland.

Chief executive Simon Arora and his family are the biggest shareholders in the business, meaning he will pay himself £30m, in addition to a £44m dividend payout revealed two months ago.

Arora said: “Our trading performance is testament to the hard work and commitment of all our colleagues, to whom I express my sincere thanks.

“Notwithstanding our status as an essential retailer, with lockdown restrictions in the UK having tightened there remain uncertainties ahead,” he added.



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