Joules confirms talks to sell stake to Next
Joules said it was also in discussions over joining Next’s burgeoning online platform to support its “long-term growth plans”. It follows reports at the weekend that Joules was looking to sell a 25% stake to Next.
Joules did not confirm the size of the stake up for sale, except to say it would see Next become a “strategic minority shareholder”. But it stressed the talks may not lead to agreement, with a further announcement to be made “if and when appropriate”.
Joules has issued a series of profit warnings in 2022, leaving its shares slumping by nearly 90% since the start of the year.
It said last month it had called in KPMG advisers to look at bolstering its finances as soaring costs and waning consumer confidence hit the group’s bottom line, with speculation it was considering a capital raise.
The group has since agreed an extension to its banking facilities with main lender Barclays, though this restricts its ability to pay shareholder dividend payouts.
The chain, which has around 130 stores and over 1,000 staff, also announced in May that its CEO, Nick Jones, would step down in the first half of its next financial year.
For Next, the stake acquisition would become the latest in a long line of deals to expand beyond its core chain, following tie-ups with Reiss and Victoria’s Secret, while it has also recently teamed up with hedge fund Davidson Kempner to buy JoJo Maman Bebe.
Last year, Next announced it had signed a deal with Gap to run the business in the UK and Ireland as a franchise partner.
Joules was founded in 1989 when Tom Joule started selling clothing on a stand at a country show in Leicestershire.