Rising costs hit Joules as it promises to simplify operations

Joules, the Market Harborough lifestyle retailer, says it has been hit hard by rising costs after posting a fall in profits for its first half.

In the 26 weeks to November 28, Joules saw profit before tax falls from £3.7m to £2.6m, despite revenues rising by 35% to almost £128m.

Joules has put this down to the end of government Covid support, increased wage costs because of a labour shortage in its third party distribution centre and increased digital marketing costs, with saw operating expenses rise by almost 53% to £52.2m.

Nick Jones, chief executive officer, said: “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.”