Next has joined forces with Joules founder Tom Joule to buy the retailer out of administration for £34m in cash.
The retailer plans to continue operating about 100 of Joules’ estate of 124 shops, although 19 have closed with immediate effect. As a result, Next will own 74% of the Market Harborough-based business, while Tom Joule will own 26%. Joules will move onto the Next Total Platform over time.
From early 2024, Joules’ websites and online operations – in the UK and internationally – will be operated by Next through its Total Platform, which will also provide warehousing and distribution for its retail, franchise, wholesale and concession businesses.
Tom Joule founded Joules in 1989 and built the business until in 2019 he stepped back to the role of non-executive director and passed responsibility for design to Joules’ creative teams. He recently returned to an active role as product director and will now reestablish its brand identity under the new ownership. Joules chief executive Jonathon Brown, who took on the role this year, will remain in place.
Simon Wolfson, Next chief executive, says: “We are excited to see what can be achieved through the combination of Joules’ exceptional product, marketing and brand building skills with Next’s Total Platform infrastructure.”
Tom Joule says: “After three years away from the operational side, I’m truly looking forward to inspiring teams with clear direction to excite and recapture the imagination of the customer again. Our customers have always trusted us to lead, not follow, with products that reflect their lifestyle. It’s important that we live up to the high standards they desire in design, quality and, with NEXT’s Total Platform delivery and customer support proposition, the service they expect.
“I’m so pleased that we have been able to strike a deal that protects the future of the company for all its loyal customers, its employees and also for the town of Market Harborough, which have been so central to Joules’ success.”
Will Wright, head of restructuring at Interpath Advisory and joint administrator, says: “We are pleased to have concluded this transaction which secures the future of this great British brand, as well as safeguarding a significant number of jobs. To have achieved this in such a short timetable is testament to the support we’ve received from employees, suppliers and other key stakeholders throughout the administration process, so we’d like to express our profound thanks to everyone involved.”
The context
In August 2022 Next and Joules were in talks about the possibility of Next taking a stake in Joules through its strategy of investing in brands that then sell through its Total Platform as third-party clients. However, at that stage the idea did not come to fruition, and in September, Next said it had learnt “important lessons” about its Total Platform business, including that it works best for brands with a “critical mass” of sales of at least £30m. At that time it was operating the online businesses of Laura Ashley, Victoria’s Secret, Gap, JoJo Maman Bébé and, added most recently, Reiss – its largest client to date – and has taken an equity stake in all except Laura Ashley. It moved smaller clients Childsplay and Aubin to a different models and also said it would not have capacity to take on further Total Platform clients until new warehouse picking capacity came online in the third quarter of 2023. Joules will now start operating through the platform in early 2024.
Its capacity to work with third-party brands was more limited than previously anticipated because of shortage of capacity.
Next is ranked Leading in RXUK Top500 research, while Joules is ranked Top100.
