Fashion retailer Joules has announced it is to appoint administrators, putting up to 1,600 jobs at risk after talks to find new investors failed.
The Joules board said on Monday it had “regretfully” decided to appoint Interpath Advisory administrators 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 patterned rain jackets and boots, had been struggling with falling sales for months. It has partly blamed these problems on the cost of living crisis and the UK’s summer heatwave, which reduced demand for its stylish winter booties.
The value of Joules shares had fallen more than 95% over the past 12 months to 9.22p. of 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 exchange, Joules said: “The board is taking this action to protect the interests of its creditors.” These creditors are suppliers, landlords and Barclays, their lender.
Joules had about 130 stores and employed more than 1,600 people before the announcement. However, a company spokesman declined to comment on possible layoffs.
Joules Group said last week it was in financing talks with its founder, Tom Joule, and others. However, on Monday, Joules said a “fundamental investment in a capital increase” had failed and it had been unable to attract short-term loans while it tried to find funding from another source.
Joule, who founded the company in 1989 after finding a market for colorful booties at country fairs, said he regretted a “deeply disappointing day for Joules and a sad day for me personally.”
He made tens of millions of pounds from the company’s 2016 listing on London’s Aim stock exchange but remained a non-executive director. He returned as an executive in September to try to lead a final turnaround.
“While we have made significant progress during this period, unfortunately, we simply have not been able to make the necessary changes to the model quickly enough in this challenging environment,” Joule said in a statement. “I strongly believe that Joules remains a desirable and differentiated brand that, with the right model and structure, can thrive again.”
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Joule said it was “business as usual right now.” The company’s website appeared to be accepting orders as of Monday afternoon.
The company had struggled for months to find new sponsors. FTSE 100 retailer Next, which stocks Joules products, entered into talks with the company in August about acquiring a 25% stake, but quickly walked away.
In response to the news that Joules was planning to call in administrators, retail analyst Nick Bubb said: “Next will certainly be ready to pick up the pieces.”
The announcement did not give details of when the companies would enter administration, although similar processes are believed to take between five and 10 working days.