Joules boss blames spreadsheet error for festive availabilities crisis

Joules chief executive Nick Jones, who only took the reins of the fashion brand from long-term boss Colin Porter towards the end of 2019, said the profit warning over Christmas was due to an error on a spreadsheet pulled together ahead of its end-of-year sales event.

“When we are planning and preparing for an event, as we do for every event, we pull a lot of information from a lot of different places. Those then get pulled together and put on to spreadsheets. On one of those spreadsheets, there was an error.

“We collectively looked at that as a team and we made what we thought was the right decision, but in the end, we left ourselves with less stock than we thought we would have from a consumer point of view.”

The error led to a £6m sales shortfall and a £3.5m impact on profits, according to broker Peel Hunt.

As a result, Joules have now chosen to work with a new third-party logistics and supply chain partner to manage its distribution centres, which Jones said would “drive the growth we’re going to need to see over the next five years.”

“What we’re doing now is working with a third-party logistics partner, to fill in the existing buildings while we reconfigure them to increase capacity and productivity. Working with an expert from the logistics provider point of view to drive the growth that we’re going to need over the next five years,” he said.

“We’re not changing the location [of our distribution centres], we’re modifying and improving that and using a new partner to manage that element of our supply chain.”

Despite wiping 33% off the retailer’s share price to 163p last week, Jones described the issue as a “one-off”, and sort to allay any fears around wider issues with the brand that last year was one of the few in fashion that consistently delivered sales and profit growth.

“If you look at the fact that our stores over that period performed in-line with expectations. We had our best ever November. We had demand online, we just couldn’t satisfy that demand,” he said.

“Traffic was up and pretty much consistent with where we’d been over the rest of the year. We’re really encouraged by our partnerships and the healthy start to the beginning of Friends of Joules [Joules’ online marketplace].”

House broker Liberum said strong customer demand for Joules’ products and robust online traffic meant “there is no issue with the brand, nor is the range out of favour” with consumers, and said the retailer remains “in rude health”.