(Sharecast News) - Shares in Joules Group plunged by more than a third on Wednesday, after the premium retailer warned on profits and announced chief executive Nick Jones was stepping down.
The Aim-listed group said market conditions had become more challenging since it published interim results in February, as the cost of living crisis started to bite.
As a result, profits in the 13 weeks to 1 May were below management expectations despite revenue growth of around 20%.
In particular, Joules - which sells branded clothing and accessories for children and adults alongside home and lifestyle ranges - said customers had been increasingly seeking out promotions, "significantly" impacting margins, while demand for home and garden categories had been subdued.
Third-party sales were also weaker than expected across a number of key UK accounts, while US wholesale sales had been hit by stock delays and poorer demand.
As result, Joules said it remained "cautious" about its near-term outlook, with trading challenges expected to continue into the first half of the next financial year.
As at 1030 BST, shares in Joules were down 36% at 35.02p. The stock has now lost 75% in the year to date.
Jones, who joined Joules in 2019, said: "Building on the strategic progress made so far, over the coming months we will continue to deliver against the clear priorities that the board and I believe will create a strong foundation for Joules to achieve its significant long-term potential, as well as helping the business navigate the current challenging trading environment."
Ian Filby, chair, said: "I would like to thank Nick for his significant efforts over the last three years. He has led the business with integrity, care and energy during what has been a particularly challenging period for the retail sector.
"The board will now begin a search for Nick's successor."
Jones will leave the retailer, which first warned on full-year profits in February, in the first half of the next financial year.
Russ Mould, investment director at AJ Bell, said: "Nick Jones is to depart after a very soggy three years for the shares.
"Jones's position had probably been rendered untenable - not that his successor will be blessed with a strong set of cards to play. Household budgets are constrained and while luxury brands servicing the very wealthy usually ride out downturns well, and cheaper outlets can attract shoppers who are trading down, more premium high street brands look vulnerable."
