After failing to find further money, Joules is about to enter administration.
Move by 1,600-person garment company comes days after Made.com's implosion.
In a move that might jeopardize 1,600 jobs, Joules is to appoint administrators after the UK clothing company failed to find an investor to preserve the business.
The company, whose clients include Taylor Swift and Catherine, Princess of Wales, has been in discussions with investors, including the chain's founder Tom Joule, to obtain emergency cash following a difficult time for the business.
Joules stated on Monday that "discussions with various parties have not been successful and have now concluded."
The firm announced in a statement that it will now file a notice of intention to appoint administrators "as soon as reasonably possible," with insolvency experts at Interpath Advisory standing by.
As the retail industry under mounting pressure, the decision gives the company 10 days to find a buyer. The company's shares, which were listed on Aim and have decreased by roughly 95% this year, have been halted.
it occurs just days after the closure of online furniture retailer Made.com, which grew significantly during the pandemic and went public last year with a valuation of £775 million. It was bought by Next last week for £3.4 million.
The creator of Joules expressed his "deep disappointment" and "sadness" over the news. After previously serving as a non-executive director, he transitioned back into an executive position in September to assist with the turnaround of the company.
As a member of the new senior leadership team, I have been working again over the past two months to streamline the company's processes, according to Joule. "While we have made tremendous progress during this time, regretfully we were unable to modify the model as quickly as was needed in this difficult situation."
The company had earlier this month stated that it was in "advanced conversations" with a number of investors to seek money. The retailer sells bright clothes and home goods that are inspired by British country lives. The board claimed that these conversations eventually came to naught. It houses 132 stores.
"There are a number of factors at play," said John Stevenson, a retail analyst at Peel Hunt. "It's not just trading over the last two to three months, it's not just the pressure on freight costs, it's not just the fact that they had supply chain issues last year, but the cumulative impact in terms of what that's done to the balance sheet has taken its toll."
Despite having previously issued warnings about rising freight rates, wage costs, and a decline in consumer spending due to the rising cost of living, the group has struggled to maintain profitability.
"There are a number of factors at play," said John Stevenson, a retail analyst at Peel Hunt. "It's not just trading over the last two to three months, it's not just the pressure on freight costs, it's not just the fact that they had supply chain issues last year, but the cumulative impact in terms of what that's done to the balance sheet has taken its toll."
The retailer reported that it was in talks with Next for a prospective equity investment in August, but one month later it said that the conversations had broken off.
"Well, at Friday's close of 9p [a share], Joules was capitalised at just £10mn, so its fall from grace has been alarming, but no doubt Next will be poised to pick up the pieces," independent retail analyst Nick Bubb wrote in a note.
In 2016, Joules valued itself at £140 million when it listed its shares at 160p each on London's Aim.
"We now await to see how the administration process progresses: will the creator re-emerge, might there be trade interest in the brand — Frasers and Next have been snatching up failing labels in recent times — or will the brand perish," continued Clive Black, a retail analyst at Shore Capital.
At the end of October, Joules had a net debt of £25.7 million, headroom of $11.4 million, but the majority of this capital was already unavailable.
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