Shares in troubled Joules were down more than a fifth today as the business warned that sales and cash reserves were down on expectations.
The values of shares in the fashion brand dropped to around 10.5p today (Monday) – vastly down on a two-year high of 300p in June 2021.
The business – based in Market Harborough in Leicestershire – has been battling disappointing sales with profits expected to be down this year amid rising costs and tighter consumer spending.
A proposed deal for Next to take a stake fell through a few months ago and Joules said it was still not ruling out a possible CVA to cut costs.
Joules also said it was also in “advanced discussions” with a number of potential investors, including founder Tom Joule.
Under Mr Joule’s leadership as product director it said it has already put a new product design and development process in place to step up the quality and design of its fashion and homewares ranged.
In a market update Joules said the turnaround strategy was paying off, including simplifying its wholesale business, withdrawing from the EU and US, putting in a leaner leadership structure – chief executive Nick Jones recently left the business – and changes to the way it sources goods.
But sales for the 11 weeks to October 30, it said, had been behind expectations with profit margins taking a hit due to discounts.
On top of that the business said its working capital was “below expectations” so it was in talks with Mr Joule and its main lender over bridging finance. It warned it that didn’t come good it would not be able to meet a November 30 deadline to repay £5 million short-term revolving loan facility.
The brand – famous for its posh wellies – said online sales in particular had suffered, although in-store sales were slightly better than expected.
It said: “The group believes this, in large part, reflects the challenging UK economic environment which has negatively impacted consumer confidence and disposable income.
“In addition, whilst dresses, menswear and more formal product categories have performed well, larger core categories such as outerwear, wellies and knitwear have been impacted, in part, by the milder than expected weather.”
The owner of Yorkshire-based car dealership Stoneacre Motor Group has snapped up £1 million of shares in Joules in recent weeks with reports he was considering a rescue bid.
Joules employs around 1,000 people and runs around 130 stores.
