Joules expects to make losses of around £2 million-£3 million for the last 12 months, despite its online sales jumping 40 per cent during the lockdown.
Like other high street retailers the business was forced to close its stores at the end of March and bring in strict contingency measures as high street sales ground to a halt in both the 海角视频 and key markets such as Germany and the US.
The south Leicestershire business said steps taken so far to mitigate the immediate effects of the pandemic included raising £15 million on the markets and adding £15 million to its bank overdraft.
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Joules said it has also shifted some of its unsold stock for sale further down the line, cut orders from suppliers for its autumn/winter ranges, and negotiated greater flexibility with suppliers for its spring/summer 2021 ranges – so it can adjust levels of stock based on trading conditions closer to the time.
It has also spoken to landlords about its rents.
Yesterday it began the slow process of opening stores, with 12 out of 128 now trading. It will open the rest in phases over the coming weeks.
Its online business was kept open throughout, despite limited warehouse capacity due to social distancing, and has traded “significantly ahead of expectations” over the past three months.
The lifestyle brand, which is currently building a , said it expects revenues to May 31 to be down 12 per cent on a year earlier, at £191 million.
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While online sales for the whole year will be up 5 per cent, store sales will be down a fifth.
Wholesale sales to retailers such as Next and John Lewis have also been heavily impacted by the effects of Covid-19, down a quarter for the year at around £42 million.
It said overall pre-tax losses for the year will be between £2-£3 million.
By comparison, in the year to May 2019, revenues were up 17.2 per cent at £218 million, with pre-tax profits up at £15.5 million.
Overall, the business said it had enough headroom – together with the actions it has taken to maintain sales, manage costs and preserve cash – for the board to be confident they were well positioned to navigate a “potentially extended period of subdued customer demand”.
Shares in the business were up about 10 per cent today at £1.25.
Chief executive Nick Jones said: “Whilst this continues to be an exceptionally challenging period for people, communities and businesses, I am delighted with how Joules has responded over recent months.
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“We were quick to adapt to the initial disruption of the Covid-19 pandemic by bolstering our liquidity position, preserving cash and focusing our trading online.
“We are very encouraged with the significant 40 per cent growth in e-commerce demand during the lockdown period, which is particularly pleasing given the already established scale of our e-commerce operations.
“As we move out of lockdown and into a “new normal” for retail, I am confident that Joules is exceptionally well positioned to continue to react to changing consumer behaviours and that our brand – which brightens our customers’ lives – is more relevant than ever to consumers.
“Whilst we will continue to face very challenging trading conditions over the coming months, the Joules customer base continues to grow, and I believe the brand is stronger than ever. We are now looking forward to the re-opening of our stores as well as those of our wholesale partners.
“I would like to take this opportunity to again thank our amazing colleagues for their resilience and hard work, our loyal customers for their support, and our valued business partners for their flexibility and collaboration throughout this uniquely challenging time for us all.”