(Adds details on dividend cancellation, cash position, background)
March 19 (Reuters) - British fashion retailer Joules Group on Thursday cancelled its interim dividend and said the industry was in need of more support from the government, as it reported lower store traffic due to the coronavirus outbreak.
Retailers have been hit hard as people stay at home to curb the spread of the virus. Superdry said on Wednesday it would miss its 2020 targets after having to close 78 stores in Europe due to the crisis.
Joules warned that the pandemic will hit its near-term profitability and said it was reducing its expenditures by cutting non-critical costs and spending.
The company said cancelling its dividend will save it 700,000 pounds ($808,220.00) of cash, adding that it has 16 million pounds cash headroom and a “strong relationship” with its bank, Barclays, as well as with its founder and major shareholder, Tom Joule.
“We strongly echo the position of the British Retail Consortium and other senior retail leaders that more urgent action is needed to provide support to those working in retail during these challenging and uncertain times,” the company said.
The British government said earlier this week it would launch a 330 billion-pound lifeline of loan guarantees and provide a further 20 billion pounds in tax cuts, grants and other help for businesses facing the risk of collapse due to the pandemic.
Joules, known for its hand-drawn or hand-painted prints, said its e-commerce channel has also been impacted but to a lesser extent as customers tighten their purse strings.
$1 = 0.8661 pounds Reporting by Tanishaa Nadkar in Bengaluru; Editing by Aditya Soni