Some 1,700 jobs at risk as struggling retailer Joules prepares to call in administrators after rescue talks fail
- Retailer said talks about equity raise and bridge financing had failed
- It has filed a ‘notice of intention’ to appoint Interpath Advisory as administrators
- Joules shares have also now been suspended on the junior market
Struggling fashion retailer Joules is set to call in administrators after rescue talks to secure a fresh cash injection and bridge financing failed.
The move puts around 1,700 jobs at risk across its 130 stores, with the company’s shares now suspended on the junior market, pending clarification of its financial position.
Joules said it had resolved to file a ‘notice of intention’ to appoint Interpath Advisory as administrators after talks with investors such as founder Tom Joule regarding an equity raise, as well as negotiations with lenders, had failed.
Outdoor goods vendor, the Garden Trading Company, which is owned by the same parent company as Joule’s, is also on the brink of collapse.
Joules said it has filed a ‘notice of intention’ to appoint Interpath Advisory as administrators
‘The board is taking this action to protect the interests of its creditors,’ the company said in a statement.
It added it would make further announcements ‘in due course’.
The brand, famous for its posh wellies, is the latest retailer to face collapse as shoppers tighten their belts.
Last week, online furniture company Made.com also appointed administrators, resulting in 400 job losses.
‘Joules is the latest victim of the UK’s retail crisis as the demise of the high street and the cost-of-living crisis bite,’ said Victoria Scholar, head of investments at interactive investor.
‘Joules has been struggling with the squeeze on household budgets after the pandemic and the war in Ukraine boosted inflation, supercharging the cost-of-living, leaving far less money left over for households to spend on retail.
‘On top of that retailers including Joules have been grappling with the rising cost of everything from materials to workers’ wages to energy bills.’
Joules launched a turnaround plan in September after retail giant Next abandoned plans to inject £15million into the business.
But sales have continued to disappoint in the past couple of months, with the company blaming milder weather as well as the cost of living crisis for underperformance.
The latest UK retail sales figures confirm the difficulty facing shops across Britain, with a 6.9 per cent slump in sales in October compared to last year.
Fresh figures will be released on Friday and are expected to highlight the current strain on consumers.
Meanwhile, the number of company insolvencies in England and Wales hit its highest level in the April-June period in nearly 13 years, as surging energy prices took their toll on business, data showed last month.
Sarah Riding, retail partner at law firm Gowling WLG, said it was likely that a rival retailer may come to the rescue ‘of a brand that still holds resonance with consumers’.
‘While the brand may need to identify supply chain contingencies that deliver more value for money for consumers with lighter pockets, the potential is there for a partner to emerge and help facilitate this’, she added.
Advice for Joules shoppers
Lisa Webb, consumer rights expert a Which?, has this advice for Joules shoppers:
‘When a company is in administration, it may not accept the return of items. Many customers may find themselves in a situation where items have not been delivered.
‘It is always worth trying to claim for a refund in these situations, but customers should know it is not guaranteed. The cost of repairs for faulty items could still be claimed if they came with a warranty.
‘If you’ve bought something on your credit card costing more than £100, the card provider is jointly responsible for any breaches of contract.
‘You can claim under Section 75 of the Consumer Credit Act if the item is faulty or not delivered. If you paid for goods that cost less than £100 on a credit or debit card, you may be able to claim under chargeback.’