Joules calls in administrators as rescue talks collapse
Around 1,600 jobs at Joules were left in the lurch on Monday after the retailer called in administrators.
The company suspended trading on the London Stock Exchange on Monday after emergency rescue attempts failed.
In a statement on Monday morning, the fashion firm said that talks with potential investors for an equity raise process “have not been successful and have now been terminated”.
Joules has been rocked by sliding sales and soaring costs as inflation hits the retail sector this year, while a mild autumn has dampened demand for its jumpers and wellington boots products
Joules has been hunting for cash from investors for several months and had been in talks with Next over a potential purchase of the firm.
However, Joules bosses said they had called in administrators at Interpath advisory limited to “protect the interests of its creditors”.
Shares in the firm were suspended on the AIM market from 7:30am on Monday after chiefs filed a request a suspension of trading.
Joules bosses said that further announcements would now be made in “due course”.
Analysts said Joules had a strong brand and predicted that it would receive takeover interest in the coming weeks.
“Although it will need a modern twist to help it survive longer term, there is likely to be significant interest in the name and the intellectual property,” Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said.
The retailer may have emerged unscathed from the current consumer spending slowdown had its “product ranges had been better diversified and the design teams had kept up with the trends,” Streeter added.
While younger shoppers started being drawn to the athleisure on offer from fast fashion firms, even Joules’ core customer base had been “falling out of love” with its floral fashion, she said.
Although it is difficult for a company based on British heritage to “move with the times,” the collapse of the retailer was evidence that” fast moving fashion trends can cause serious damage to slow coaches,” Streeter said.