Joules brand soars, but it is not immune to downturn
JOULES is more than just a clothes company: it’s a lifestyle brand. That means it sells a range of goods beyond clothing, from wellington boots and handbags to crockery and bed linen. It caters to all the family, including babies and children. And its products are supposed to make their owners feel good, being colourful, well made and very British.
The company has more than 100 stores dotted round the country, a flourishing online business and a growing presence overseas. There is a decent wholesale business too, selling to major retailers such as John Lewis and Next Label.
Joules’ wares are not cheap but the group is still doing rather well. Earlier this month, chief executive Colin Porter said profits for the year to May 28 would be well ahead of expectations, as group revenues increased almost 20 per cent to £157 million and margins strengthened.
The full results will be released next month and brokers now expect profits of almost £10million, up 33 per cent on last year. Further steady increases are expected for 2018 and 2019 too.
Joules has a loyal customer base, many of whom are relatively wealthy professionals, living in market towns and smaller cities. They are not immune to an economic downturn, but they are more resilient than the less well-off.
Midas verdict: Brokers admire this firm and its blend of stores, wholesale, international and online businesses. The shares may well withstand whatever the economy throws at them over the next few years but, at 304½p, cautious investors may benefit from taking some profits and selling about 30 per cent of their stock.