Joules says it plans to appoint administrators, after discussions about possible financing failed. The retailer had previously said it was in discussions about a bridging loan to get it to the point where it could either raise equity and/or put a CVA (company voluntary agreement) in place. But it confirms this morning that those talks have ended without success.
Now the fashion and lifestyle retailer is to file a notice of intention to appoint administrators from Interpath Advisory “as soon as reasonably practicable” to both Joules and to its subsidiary The Garden Trading Company.
The company’s shares have been suspended with effect from 7.30am today.
Its website is currently running a Black Friday event offering 70% discounts, billed as “our biggest Black Friday yet”.
Funding talks fail
Earlier this month Joules said that it was looking at its funding options. Discussions with strategic investors included potentially raising equity to strengthen its balance sheet and a CVA (company voluntary agreement). At the time it also said that its net debt stood at £25.7m at the end of October. Within that it had remaining headroom of £11.4m, of which £5.6m was ‘trapped cash’ – held in transit by payment providers – and £5m was due for repayment at the end of November.
Joules previously said it was talking to founder Tom Joule and to its lender about a possible bridge financing proposal – but today it confirms that discussions about a bridge financing proposal were not successful and have been ended.
The retail brand, ranked Top100 in RXUK Top500 research, said at that time that its sales had been behind expectations over the late summer and early autumn as shoppers spent less online, although slightly more in-store, than expected in a challenging environment that has hit both consumer confidence and disposable income. It also said warmer than expected weather had also affected sales of products such as outerwear, wellies and knitwear – although dresses, menswear and more formal clothes had sold well.
It also said that UK wholesale had performed well, but both US wholesale and its Garden Trading business had underperformed. In its last published set of results, for the six months to November 28 2021, Joules said that 63% of its £127.9m sales took place online – both through its own website and through partner websites – as business shifted online during the Covid-19 pandemic and associated trading restrictions. But it said that rising costs – from the cost of digital marketing to wage rises, distribution skills shortages, and Brexit tariffs – all meant “disappointing” profits – with pre-tax profits of £2.6m. At the time it said it would focus on profitable partnerships and simplify its distribution channels.
Joules was founded in 1989 when Tom Joule started selling clothing on a stand at a country show in Leicestershire. As of November 28 2021 it had 128 shops; store locations include UK holiday destination towns and CentreParcs.