11:46 am, November 14, 2022
Troubled fashion retailer Joules is to apply for administration – despite a major investment last month by the boss of dealer group Stoneacre.
Some 1,600 jobs are now under threat after Joules, which has 130 stores in the UK, was unable to secure another vital cash injection.
Stoneacre boss Richard Teatum bought an 8.9 per cent stake in Joules on October 6, equating to around £1m, in a bid to help reverse its ailing fortunes.
He was reported not to have ruled out taking part in a rescue of the fashion company, saying: ‘I might buy some more [shares], I might sell some. I don’t mean to be vague: it’s just I’m keeping my options open.
‘I think the shares are very good value, otherwise I wouldn’t have bought them. I think the company can be turned around; not easily, but it can be.’
The brand – famous for its posh wellies – said talks over an emergency cash-call with investors including founder Tom Joule were unsuccessful and had ended.
It said it would file a notice of intention to appoint Interpath Advisory as administrators to the firm and its subsidiaries, including online home and garden retailer The Garden Trading Company, ‘as soon as reasonably practicable’.
Joules said: ‘The board is taking this action to protect the interests of its creditors.’
The firm, which was founded in 1989, is suspending trading of its shares on the stock market, adding that further announcements will be made ‘in due course’.
It is expected to formally appoint administrators in the next five to 10 working days, but stressed that its stores and websites were continuing to trade as normal.
Analysts at Shore Capital said: ‘Joules has been a remarkable tailspin story that has, frankly, reached a position that has seemed increasingly inevitable in recent times: the application for administration.
‘With this news there will be understandable worry for its employers and suppliers.
‘We now await to see how the administration process progresses. Will founders re-emerge, could there be trade interest in the brand – or will the brand disappear? Time will tell.
‘The new Joules, should it re-emerge, is likely to be a smaller venture we sense and so represent another notch in UK apparel retail industry capacity reduction, following on from the more major rationalisation by Arcadia and Debenhams that represent a material positive for the rest of the trade, removing surplus capacity and disruptive promotional activity.’
Next had been in talks with Joules over a deal to buy a minority stake, but discussions collapsed in September.
Joules then said it was holding talks over a so-called cornerstone equity raise with strategic investors including Tom Joule – who recently returned to the firm in an executive position as product director.
It was also holding discussions with Joule and its lender over a possible bridge financing deal to allow the funding talks to continue, but failed to secure the crucial strategic investment needed.
At the same time, the group was considering the option of a company voluntary arrangement – which typically involves a firm agreeing delayed or reduced payments to landlords or other creditors – as part of a restructuring to turn around its fortunes.
It has suffered a slump in shares over the past year following profit warnings amid soaring costs and a downturn in consumer spending.
