Joules – clearly defying the High Street gloom

Way back at the end of January this year, Joules (LON:JOUL), the premium lifestyle brand, showed clearly that it was defying the gloom being endured elsewhere on the High Street.

The company, well-known for its polka dot wellington boots and its colourful raincoats, announced that in the 26 weeks to 25^thNovember last year, its sales were 17.6% ahead at £113.1m. That revenue saw pre-tax profits increase 14.7% to £10.7m.

At the same time as announcing its interims, Joules stated that the retail sales for the seven weeks over Christmas and up to 6^thJanuary this year were an impressive 11.7% higher.

Certainly, Joules is showing that if you get your brand in the right market place then its value will present itself.

Started some 30 years ago by Tom Joule, his initial offering was of colourful and practical high-quality clothing that he sold off at country shows, race meetings and other outside events. It was so distinctive in style that his range almost sold itself.

It was not until 2000 that Joule actually opened his first shop – in Market Harborough. Over the following years his brand grew more significance and became well accepted.

The subsequent expansion of his business has been almost text book.

The company went public way back in May 2016, valued at some £140m.

It now has 123 of its own retail shops across the UK and in the Republic of Ireland, with another 34 concessions at stores like Fenwicks, House of Fraser, Next and John Lewis.

But direct retail is not the only part of the Joules strategy. In addition, it has an extremely good online offering, whilst it also wholesales its products through some 2,000 stockists across the country, and it is now selling its products into Germany, the USA, France and other European markets.

Its product range has expanded from just clothing and footwear, particularly for women in the 25-44 age range, and has evolved over the years to offer to men and younger family members.

Its premium lifestyle brand is now licensing out to selected partner companies like Vision Express for eyewear, sofas with DFS, branded toiletries with Boots, whilst other extensions into watches, stationery, and even DAB radios are planned.

Meanwhile its own range of distinctive designed and unique products now take it into knitwear, handbags, homeware, gifting, and accessories – and all almost self-selling. Going forward it has an exciting pipeline of opportunities.

Consistently Joules has been building upon its successful ranges and concentrating upon customer retention and loyalty. It now has some 1.4m active customers, who use any or all of its selling channels – whether direct, online or through wholesale or partner offers.

It really does have a flexible and well-integrated ‘total retail’ model, which enables rapid reaction to changing customer preferences. Whilst it also has a clear strategy for sustainable development into target international markets.


It is interesting to note the comparison of the company’s results from 2014 to 2018 – the number of stores went from 75 to 118 in that period. Sales almost doubled from £95.6m to £185.9m and pre-tax profits rose from £3.6m to £11.2m. Earnings leapt from 3.3p to 11.8p per share.

However, the strength of the company’s text book growth was shown by the revenue split over the years – e-commerce more than doubled from £23.9m in 2014 to £49.8m in the year to end May 2018, stores sales went up from £39.3m to £75m, whilst wholesale went from £26.9m to £55.5m.

The January 2019 interims announcement suggested that the good momentum of the first half and over the Christmas sales period could well continue for the rest of the trading year to the end of May this year.

Broker estimates for 2019 are for sales of £214m, pre-tax profits of £14.5m and earnings of 13.5p per share. The coming year could see £240m of sales produce £17.6m of profits and nearly 16p of earnings. Further out, for 2021, £260m sales could generate £20m of profits and 18p of earnings per share.

If this occurs, it will prove itself to be a wonderful example of well-controlled and steady growth.

On the face of it the shares of Joules may look expensive, but when you take into account that it really is a ‘premium lifestyle’ brand, then I consider that a premium for the shares is justified.

Floated at 160p way back in 2016 the shares have been up to 387p less than a year ago. Today trading at around the 282p level I am convinced that they are a cracking purchase, looking for similar heights again within the next year or so.