Joules CEO resigns as he warns cost-of-living crisis is hurting profits

Joules CEO Nick Jones is stepping down
// Joules CEO Nick Jones will leave the fashion retailer in the first half of next fiscal year
// The retailer also noted that earnings performance in the most recent quarter was impacted by falling consumer confidence

Joules CEO Nick Jones is set to leave the fashion retailer as it has encountered challenging conditions since Easter and turned profits in the most recent quarter.

Jones, who was CEO at Joules for three years, will step down in the first half of the retailer’s next fiscal year. Joules will begin searching for his successor.

The retailer warned that profits in the 13 weeks to May 1 had fallen short of expectations as the market became increasingly promotional, which hit margins and demand for home and garden was subdued.

This has resulted in the Garden Trading business performing “well below expectations” during its peak sales period in March and April.

The retailer said market conditions had become “more challenging” during and after the Easter period as consumer confidence was hit by the rising cost of living.

Meanwhile, inventory delays and lower demand had resulted in a weaker-than-expected result Third Party Sales.

Joules said it expects trading challenges to persist in the first half of the current fiscal year and said it is “cautious” about its near-term outlook. Joules is focused on improving profitability and cash generation through cost cutting and significantly aged stock.

CONTINUE READING: Joule’s commercial manager is leaving the fashion retailer

The retailer is moving forward with plans to simplify the business and optimize its cost base. These include phasing out the wholesale model in the US and EU and introducing higher minimum order quantities in the UK.

It plans to improve its end-to-end product process to reduce costs and reduce lead times by up to four months, which will allow Joules to increase the novelty ratio and thus the opportunity for full-price sales raise.

Joules is also expanding its supplier base to reduce its exposure to China, although it indicated there are currently no significant delays as a result of the country’s recent Covid lockdowns.

Joules chairman Ian Filby said: “I would like to thank Nick for his significant efforts over the past three years. He has led the business with integrity, diligence and energy during a particularly challenging time for retail, including during the Covid-19 pandemic.

“Under Nick’s leadership, Joules has made good progress on its strategy to evolve into a digitally-led lifestyle group. More recently, he has led the company in the implementation of a number of important strategic initiatives that will underpin the group’s future in the years to come.”

Jones added: “Building on the strategic progress made to date, we will continue to act in the coming months against clear priorities that the Board and I believe will provide a strong foundation for Joules to realize its significant long-term potential and support the company Business to face the currently challenging trading environment.

“Joules is a fantastic brand with great people, loyal customers and a differentiated product offering. Supported by the strategic actions we are taking to optimize the business, Joules will emerge stronger and better positioned to deliver long-term, profitable growth.”

Click here to sign up for Retail Gazette’s free daily email newsletter

Leave a Comment