Joules has brought in KPMG debt advisors to help it bolster its cash position.
The lifestyle clothing brand, which earlier this year warned that profits would be well below forecasts due to Covid and rising costs, said it had appointed the accounting firm to help it bring in cash and improve profitability.
The Market Harborough-based business – which sells through its own shops, other retailers and online – put out a statement this morning that it expected to have “sufficient liquidity” to help it through the short term.
It comes after The Sunday Times reported Joules was seeking a cash lifeline as the cost-of-living hits the high street.
In June 2021, shares in Joules were trading at 300p. This morning they were down to less than 26.2p, dropping 21 per cent on the day.
In a “response to media reporting” Joules said it was focussing on improving profitability, cash generation and liquidity headroom.
It said: “The group confirms it has appointed KPMG debt advisory to assist in this process.
“As at 29 May, the group had net debt of £21.4 million, giving £11.3 million headroom within its banking facilities, in line with the board's expectations.
“Whilst the group continues to manage its cash resources carefully over its seasonal borrowing peak, it expects to have sufficient liquidity to manage its working capital requirements over this time.”
Back in May management said performance had fallen below expectations in some parts of the business, as it announced that chief executive Nick Jones was leaving the business.
Management said they were shaking up wholesale operations including pulling out of the EU and USA next year. Instead they planned to focus on its own websites in the US and Germany.
They also said they were cutting the amount of products it sourced from China, to cut its dependency on that country and improve stock delivery times.
The May announcement was made with a trading update saying sales were up almost a third over the previous three months although the rising cost of living was making market conditions more challenging.
Today the business said: “The group is making good progress against previously announced key initiatives aimed at simplifying the business and optimising the cost base to improve long-term profitability.
"This includes implementing significant changes to its wholesale operations to focus on fewer, profitable wholesale accounts and improving and simplifying the group's end-to-end product process to reduce costs and shorten lead times."
