Joules today says that it is talking to Next about the possibility of moving to Next’s Total Platform services – and that Next may also take a minority stake in the business. The move fits with a Next strategy that will see it launch the new Gap UK website later this week.
The Joules strategy
Investment from Next, says fashion and lifestyle retail brand Joules, could support its long-term growth plans, with the possible Next investment raising about £15m for Joules. However, as yet the move is not confirmed and would be subject to approval by Joules’ shareholders.
“There can be no certainty these discussions will lead to any agreement,” says Joules in today’s statement. “A further announcement will be made if and when appropriate.”
Joules, meanwhile, has recently seen its profits under pressure in a discount-led trading environment and as the rising cost of living affects shopper confidence. It aimed to respond by moving away from less profitable wholesale models, and reviewing its supply chain to shorten lead times in a way that will see it cut the proportion of products sourced from China to less than half of historic levels by this autumn. Instead it is buying from geographically closer countries, such as Turkey.
The Next strategy
The move would fit with Next’s stated strategy of becoming a platform for clothing and homewares brands, providing them with its ecommerce and fulfilment technology while also taking a stake in some of those brands.
So far it has invested in the UK franchises of Gap and Victoria’s Secret, and in April invested £16.3m to take a 44% stake in JoJo Maman Bébé.
The new Gap website, operated by Next, launches later this week, offering click and collect at more than 500 Next shops – and next-day delivery for orders placed by 11pm. Gap has a shop-in-shop at the Next flagship on Oxford Street, London, and more similar shops are set to open later in locations across the UK later this year. Shoppers who buy online from Gap UK will be able to return items to shops operated by either brand for free, or have them collected from home for £2.50.
Next is ranked Leading in RXUK Top500 research, while Joules is ranked Top100.
