Shoppers waiting for promotions and mark downs before buying have hit margins at 'country chic' fashion and lifestyle retailer Joules.
The firm has reported “significant pressure” on its gross margins in its latest trading update with “customer appetite weighted toward mark downs amidst a heavily promotional environment”.
But cost reduction measures are paying off, it reports with loss before tax expected to be narrower than the predicted £1.5million.
And it has outlined retail sales growth of 8.5% year on year in the first six months of its FY23.
READ MORE: A luxury brand like Joules should stop discounting
The report states: "The Group is making good progress on its plans to improve profitability by simplifying the business and optimising the cost base.
"This includes implementing the Group’s previously disclosed plans to reduce its global wholesale accounts to focus on long-term profitable partnerships, shorten product lead times, and diversify the Group’s ethically sourced supplier base."
The report also reveals that the group has received credit approval for a further £5m headroom on its borrowing facilities with Barclays Bank until November 2022 to support working capital requirements.
The Group has net debt of £17.7m, giving £15.0m headroom within its current banking facilities.
It states: "Whilst the Group will continue to manage cash resources carefully, the Board expects that the Group has sufficient liquidity to manage its working capital requirements over this time including, in the event that it was utilised, repayment of the extended facilities in November 2022."
Earlier in July, the group confirmed it had brought in KPMG debt advisors to help it bolster its cash position.
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