In July, the prestige retailer Joules announced it had brought in debt advisors at accounting firm KPMG to help it boost profitability.
The lifestyle clothing brand has been hit with rising costs and customers reluctant to spend while the cost-of-living crisis hits.
Since then, a recent deal for Next to take a stake in the business has fallen through and the firm has confirmed that it is not ruling out a CVA in a bid to turnaround the business.
A CVA is an agreement with creditors to allow a percentage of debt to be written off to allow it to stay in business.
So, what has gone wrong for Joules and what should it do next?
BusinessLive asked the retail experts.
What's the background?
Founder Tom Joule started Joules in his home town of Market Harborough in 1989 after buying 80 per cent of the family clothing firm from his father Ian.
He sold socks, wellies and hats at agricultural fairs and equestrian shows before supplying Cotswolds and seaside shops, then designing his own range of distinctive, branded goods.
The business floated on London's junior market in May 2016, at a time when sales and profits were growing exponentially.
In April 2021, Mr Joule sold almost five per cent of of the company's shares and now owns 21.8 per cent of the Leicestershire business.
It sells online, overseas and is stocked in High Street outlets like John Lewis and country and agricultural shops including Mole Valley Farmers.
The country casual firm has ranges for men, women, kids and the family dog. You can get homeware and gardenware there too for the complete country-chic look. Joules has been expanding its product range outside of clothing in recent years.
Last year, it acquired the Garden Trading Company, introduced furniture lines including sofas with DFS, as well as toiletries with Boots and spectacles through stockists such as Vision Express.
In July last year, it brought in Moneysupermarket finance director Caroline York as its new chief financial officer.
In April 2022, chief executive Nick Jones announced he was leaving the firm after two and a half years but would stay until the middle of the year.
Last autumn, Joules moved into a new £20 million headquarters, across the road from its old Market Harborough base.
In May, the firm gave 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.
Read more: Founder Tom Joule reflects on the growth of his retail empire
Brand confusion
Anne Phelan, senior director of retail at digital transformation business consultancy Publicis Sapient, said that shoppers were no longer clear whether Joules was a premium, boutique-style brand or not.
She said the ticket price was not high enough to be a luxury buy and it offered too many discounts.
"Joules is a great brand that offers premium product, however the pricing model does not match that," she said.
"The secondary point here is that it is now rare the Joules customer expects to pay full price for a product. All too often they are in a sales event so, as a customer, you know you will pay less than full price in the not-too-distant future if you wait.
"We have seen far too many retailers go down this route which has meant they eventually cease to exist, for example the Debenhams blue cross sale."
Concessions have diluted the brand
In the UK, the first interaction with Joules tends to be through Next or John Lewis and is generally online. This has made Joules lose its brand identity of 'Inspired by the British country lifestyle'.
Ms Phelan added: "As a customer, you are more likely to think of Joules in relation to these other retailers rather than as a standalone entity.
"In order to survive, I believe Joules needs to decide on who its target customer base is and what its brand stands for. If it is how it was originally created, as a product inspired by the British country lifestyle, it needs to believe in it and stick with it, with the correct pricing and less 'events' that dilute the main RRP," she said.
Cost of Living Crisis
With shoppers facing less-than-inflation wage increases and soaring fuel and energy bills, nice-to-have purchases from retailers like Joules are falling off the shopping list.
Dr Gordon Fletcher, retail expert from the University of Salford Business School, said luxury and specialist clothing brands were always particularly prone to a change in these kinds of shopping behaviours.
He said: "With over 100 physical specialist stores across the UK as well as being stocked in John Lewis, Topshop and Selfridges, the brand will be among the first to feel the pinch as shoppers try to reduce their costs.
"Shoppers will be exploring other options such as buying cheaper brands, holding off on bigger purchases, looking to second hand options or getting worn items repaired."
Ongoing uncertainty
When the pandemic hit, Joules - like many retailers - saw its share price slump.
The company's share price fell to 60p at the beginning of the pandemic before recovery in June 21 to 298p as investor confidence returned to retail.
But the current economic crisis was far less clear cut, said Dr Fletcher.
He said: "Unlike the effects of the lockdown when there was also an expectation that the downturn in shopping would be reversed, the outlook for rising prices is, more certainly at least, a medium-term prospect.
"With a longer period of reduced consumption, the impact for Joules (and other retailers) is less certain."
That's a future that was currently being reflected in its share price, said Dr Fletcher, which at the time of writing was 218p.
What happens next?
Joules is working with KPMG to find ways to improve profitability, cash generation and liquidity headroom.
It announced in May that it was shaking up wholesale operations including pulling out of the EU and US next year. Instead, it planned to focus on its own websites in the US and Germany.
It also said it was cutting the amount of products it sourced from China, to cut its dependency on that country and improve stock delivery times.
In its latest trading statement in October, Joules said: it was making progress in developing its turnaround plan which focuses on driving higher profitability including through: a better pricing and promotional strategy; focusing on more profitable product categories with shorter time to market; and optimising the Group's channel mix.
The statement said: “As previously announced, the group continues to assess its ongoing financing requirements, including a possible equity raise, to allow the company to strengthen its balance sheet and provide a strong platform to support the turnaround plan.
“Whilst this remains the board's focus, the Company also continues to consider a range of other potential options which may be available to it, where a CVA is one of a number of such alternatives, and notes it has not determined if such alternatives are required.
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