The fashion retailer Joules is to appoint administrators after talks with investors about rescue financing failed, leaving its 1,600 staff at risk of losing their jobs.
The company said last week it was in negotiations with strategic investors about an emergency equity raise but said that it needed bridge finance to avoid defaulting on a bank loan at the end of this month.
Joules said today: “Discussions with various parties have not been successful and have now terminated.”
It has filed a notice of intention to appoint Interpath Advisory as administrators to the company and its subsidiaries, Joules Limited, the Garden Trading Company Limited and Joules Developments Limited.
The Aim-listed company has also asked the London Stock Exchange to suspend trading in its shares, which closed at 9¼p on Friday. They were trading at more than 300p in June last year.
Last week, the online furniture seller Made.com also appointed administrators, resulting in 400 job losses. 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.
Those approached about the bridging loan to pay a £5 million loan facility due on November 30 included Tom Joules, the company’s founder. The retailer needed the loan to buy time to push ahead with the fundraising as well as a possible company voluntary arrangement, an insolvency procedure, to help cut its rent bill.
Joules, 54, launched the fashion retailer in 1989 by selling clothes at a country show in Leicestershire. The chain is known for its colourful, country-inspired clothing. It has about 130 shops.
The company has been struggling since it issued a profit warning in August after the heatwave hit sales of wellies and other wet-weather gear. It said its financial performance for the year would be “significantly below current market expectations”. At the same time it was, like other clothing retailers, suffering from inflation and as shoppers became more cautious about spending.
Shortly after the warning, Joules said it was talking to Next, the FTSE 100 fashion retailer, about a £15 million equity investment. No deal was reached and last week Next acquired Made.com’s brand out of administration.
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Joules on brink of collapse as it enters administration with 1600 jobs in the balance