The founder of clothing and homeware company Joules is hoping the brand still has a future despite the business going into administration. Tom Joule formed the firm in his Leicestershire home town of Market Harborough in 1989, overseeing an annual turnover of £200 million at its peak.
He is now hoping that Joules' products can continue to be supplied with him still playing a role. Mr Joule also insisted it would be "business as usual" for now while administrators Interpath Advisory Limited assume control of the group’s finances, reports Business Live.
Mr Joule said: "Today is a deeply disappointing day for Joules, and a sad day for me personally. Since the brand’s early days of selling at country shows across the UK, we have always enjoyed a special relationship with our customers, and that hasn’t changed, as is demonstrated by our healthy brand indicators.
"However, we recognise our business has become too complex and our model today is not aligned to succeed in the current, tough trading environment. Over the last two months I have been back working as part of the new executive leadership team to simplify the business and improve operations.
"Whilst we have made significant progress during this period, regrettably we simply could not make the required changes to the model quickly enough in this challenging environment. For our stakeholders, including our customers and our people, we recognise today’s news will be deeply unsettling, and we are sorry for this.
"However, we would like to reassure everyone it remains business as usual right now. It is my hope to be able to continue to play an important role in creating Joules products for our customers that reflect our brand and values. It is my strong belief that Joules remains a desirable, differentiated brand that, with the right model and structure, can thrive again."
Joules fell into trouble when its profits dropped due to the Covid-19 pandemic, rising costs and a dip in consumer spending. As well as calling in the administrators, Joules also suspended trading of its shares on the AIM stock exchange.
It is now estimated that as many as 1,600 jobs are at risk among the employees who work in Joules' 160-plus shops, at its Leicestershire headquarters and in its distribution operations. Joules had been hoping to avoid administration by attracting new investors but talks this summer regarding fellow fashion retailer Next buying a stake in the business failed to offer a financial reprieve.
Mr Joule had also considered launching a Company Voluntary Arrangement (CVA) which would have allowed the business to continue trading while offloading debt – most probably in the form of unsustainable rents. Shares in the business plummeted to 9p before the administration news today, compared to a value of £3 in mid-2021.
In recent years, Joules have collaborated on ranges with the DFS sofa company and agreed licensing deals with the likes of Boots for toiletries and with Vision Express for spectacles. Mr Joule also played a leading role in the launching of a a new men’s suit range, stocked by Next.
In the trading year before Covid, Joules sales were £218 million, which represented a 15 per cent uplift on the previous year and, as recently as early 2021, the company bought furniture and accessories Garden Trading Company for £12.5 million. But Russ Mould, an investment director at online stockbroker AJ Bell, has argued that Joules is now "less a posh welly and more an old boot with a hole in it".
He said: "Joules is neither a luxury brand nor does it offer compelling value and the premium high street space looks particularly vulnerable in an environment when there is so much pressure on household budgets. Shareholders look set to be left with nothing, though they have had a fair amount of warning of this outcome given the precipitous slide in the Joules share price since the start of the year.
"The destiny of the Joules brand itself remains up in the air. Both Next and Frasers look logical suitors given their relatively robust position and recent habit of hoovering up assets from failed retail businesses. The exit of a significant high street name like Joules from the scene could lead to market share gains for those businesses which remain."
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