The founder of Joules says he hopes the brand will live on after it announced it was bringing in administrators.
Tom Joule, who launched the business in his home town of Market Harborough in 1989 and helped grow it to a turnover of more than £200 million, said he was sorry for what had happened, but hoped it could continue supplying its products, and with him playing a part.
He also reassured shoppers that it would remain “business as usual” for the time being while administrators at business specialist Interpath Advisory Limited took over the group’s finances.
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.”
Mr Joule has played a key role in trying to turn the fashion and homewares group around after it was hit by a combination of lower profits due to Covid, rising costs and tighter consumer spending.
It finally announced today (November 14) that it was calling in administrators and had suspended trading of its shares on the AIM stock exchange, putting at risk the jobs of around 1,600 people who work for the business at its Leicestershire HQ, in its distribution operations and 160-or so shops.
Joules had been looking for investors in recent weeks, including Mr Joule himself, and was also considering launching a CVA which would have allowed it to keep trading while offloading debt – typically in the form of unsustainable rents.
Formal talks for Next to take a stake in the business fell through in the summer.
Shares in the business were around 9p when they were suspended, compared to around £3 in mid-2021. The business floated on London’s junior market in May 2016, at a time when sales and profits were growing exponentially.
In recent years it worked on ranges with the DFS sofa company, and struck licensing deals covering everything from spectacles stocked by Vision Express to toiletries with Boots.
There are also dog products, aimed at the almost 80 per cent of customers on its database who have dogs, and Mr Joule himself helped launched a new men’s suit range, stocked by Next.
It bought furniture and accessories Garden Trading Company in early 2021 for £12.5 million because of its “similar design-led principles”.
In the trading year before Covid, Joules sales were £218 million, up more than 15 per cent on the previous year.
Russ Mould, an investment director at online stockbroker AJ Bell, said Joules was now “less a posh welly and more an old boot with a hole in it”.
He said: “The retailer has been struggling for some time, but it is still a jolt to see it enter administration.
“Lots of things have led us to this point, with the failure of Next to come to the rescue the straw that broke the camel’s back, but ultimately Joules’ proposition wasn’t robust enough to withstand such a bleak economic backdrop.
“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.
“This has been compounded by some poor decision making, unhelpful weather – though blaming the weather is never a great look for a business – and supply chain problems.
“Joules’ cash and stock management have also been far from perfect, though it is fair to acknowledge the current storm would have tested even the most robust balance sheet.
“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.”
