Joules to increase prices in bid to boost profits amid surging costs

The retailer saw shares jump on Tuesday after it laid out plans to improve its profitability.

Fashion retailer Joules is to increase its prices because of soaring costs (Mike Egerton/PA) (PA Archive)

High street retailer Joules is to increase prices after being impacted by soaring costs and supply disruption.

The fashion business saw shares jump on Tuesday when it laid out plans to improve its profitability after missing its targets for the latest half year.

Joules told shareholders that its pre-tax profits doubled to £2.6 million for the six months to the end of November, compared with the same period last year.

However, the figure was below previous guidance and the group saw its shares plunge by about 40% last week when it confirmed profits for the full year will be well below its predictions.

Joules saw profits double after being boosted by the reopening of stores (Liam McBurney/PA) (PA Archive)

The firm said profits were weighed down by “global supply issues” which resulted in stock delays, extra Brexit-related taxes and duties and local labour shortages.

In its latest update, Joules said it “recognises the need to take actions to improve profitability” and confirmed a number of measures.

It said it needs to simplify its distribution channels, confirming plans to terminate deals with some stockists and EU sales agents in its wholesale business which it believes are not sufficiently profitable.

The firm added that it is undertaking a review of its product-making process to see if lead times can ben shortened.

Joules added that it has kept prices flat for recent seasons but is “now increasing them, where necessary, to reflect the industry-wide increases seen in raw materials, production and freight costs” and expects further price rises for autumn and winter stock.

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

Shares in Joules were up 14.4% at 59.5p in early trading.