The fashion retailer Joules has announced it attends to appoint administrators, putting at risk as many as 1,600 jobs after talks fell through to find new investors.
The board of Joules on Monday said it had “regrettably” decided to appoint administrators from Interpath Advisory to Joules Group and three subsidiaries including the Garden Trading Company. Trading in Joules shares has been suspended.
Joules, which is best known for its jackets and patterned wellington boots, had been struggling for months with falling sales. It has in part blamed those woes on the cost of living crisis and on the UK summer heatwave, which reduced demand for its posh winter wellies.
The value of shares in Joules had fallen by more than 95% over the course of the past 12 months to 9.22p on Friday. At that price, the company’s market value was £10.3m. That compared with net debt at the end of October of £25.7m, with a £5m revolving credit facility due to be repaid on 30 November.
In its statement to the stock market, Joules said: “The board is taking this action to protect the interests of its creditors.” Those creditors are suppliers, landlords and Barclays, its lender.
Joules had about 130 stores and employed more than 1,600 people before the announcement. However, a company spokesperson declined to comment on possible redundancies.
Joules Group last week said it was in financing talks with its founder, Tom Joule, and others. However, on Monday, Joules said a “cornerstone investment in an equity raise” had failed, and it had been unable to attract short-term loans while it tried to find finance from another source.
Joule, who founded the company in 1989 after spotting a market for colourful wellies at country fairs, said he was sorry for a “deeply disappointing day for Joules, and a sad day for me personally”.
He made tens of millions of pounds from floating the company in 2016 on London’s Aim stock market, but continued as a non-executive director. He returned as an executive in September to try to lead a last-ditch turnaround.
“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,” Joule said in a statement. “It is my strong belief that Joules remains a desirable, differentiated brand that, with the right model and structure, can thrive again.”
Joule said it “remains business as usual right now”. The company’s website appeared to be accepting orders on Monday afternoon.
The company had struggled for months to find new backers. The FTSE 100 retailer Next, which stocks Joules products, entered into talks with the company in August about potentially taking a 25% stake, but it quickly walked away.
Responding to the news that Joules was planning to call in administrators, the retail analyst Nick Bubb said: “No doubt Next will be poised to pick up the pieces.”
The announcement did not give details on when the companies would enter administration, although it is thought that similar processes generally take between five and 10 working days.
