The struggling retailer has announced plans to appoint administrators
(Picture: PA Media)Country fashion brand Joules is set to appoint administrators after failing to agree a financing deal to rescue the business, putting around 1,600 jobs at risk.
The company revealed last week that it was in discussions with a number of investors to try and raise cash after the mild autumn and fading consumer confidence dented its sales.
But on Monday it said those discussions had not been successful, and so administrators Interpath Advisory would be taking control in order to protect its creditors.
Garden Trading, Joules’ furniture and accessories business, will also file for administration.
Shares in the company have been suspended “pending further clarification of the company’s financial position”, the London Stock Exchange said.
The value of its shares has fallen 93% this year, from around 140p in January to 9p at the end of last week.
Once a beloved brand of the Prince and Princess of Wales, Joules began life selling branded clothing and accessories at equestrian and country shows in the late 1970s.
Tom Joule, son of the company’s founder Ian, successfully oversaw its transformation from niche brand to high street staple, and Joules opened its first store in 2000.
It now has 132 shops plus four concessions and three franchise stores across the UK, meaning its collapse would leave more empty units on Britain’s high streets.
The company listed its shares on London’s junior stock exchange market Aim in 2016, and at the time was valued at £140 million.
But despite enjoying success with its colourful ranges of country casual clothing, Joules has struggled in recent months as cautious consumers cut back on spending.
In August, it warned it was facing an annual loss due to high levels of discounting, which had squeezed its margins and left it in danger of not meeting its debt obligations.
A potential takeover deal with Next, which had been touted earlier this year, also fell apart in September.
Victoria Scholar, head of investment at Interactive Investor, said the company had become the latest victim of the wider demise of the UK high street.
“Joules has been struggling with the squeeze on household budgets after the post-pandemic and war-driven inflation supercharged the cost-of-living, leaving far less money left over for retail spending,” she said.
“The latest UK retail sales figures underscore the difficulty facing shops across Britain, with a 6.9% slump year-on-year in October as retail sales still languish below their pre-covid February 2020 levels.”
But Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown said Joules had failed to move with changing fashion trends.
“Joules might have weathered this particular storm if it’s product ranges had been better diversified and the design teams had kept up with the trends,” she said.
“The apparel retailer, once the darling of the outdoor set, had become stuck in a rut – as athleisure wear took over as the casual clothes for the younger generation and even Joules’ core customers, started falling out of love with the staples of its floral and fashion ranges.”
Others suggested that Joules may yet be bought out by a rival.
Sarah Riding, retail partner at law firm Gowling WLG, said: “Given the surprising acquisitions and strategic partnerships that have been made in the retail space recently, there should be at least some optimism that another industry player will come to the rescue of a brand that still holds resonance with consumers.”
