Joules explores options as sales decline
British lifestyle brand Joules has revealed talks with investors to inject cash into the business as sales continue to drop.
The brand's founder Tom Joule, who recently returned to the firm in an executive position as Product Director, is among a number of strategic investors in discussions to provide a “cornerstone investment in an equity raise”.
Joules said it was also continuing to explore a possible company voluntary arrangement (CVA) restructuring – typically seeing a firm agreeing delayed or reduced payments to landlords or other creditors – as trading remains under pressure, with sales for the 11 weeks to October 30 2022 lower than expected and profit margins taking a hit due to discount sales.
In a statement, Joules said: “The group believes this, in large part, reflects the challenging UK economic environment which has negatively impacted consumer confidence and disposable income.
“In addition, whilst dresses, menswear and more formal product categories have performed well, larger core categories such as outerwear, wellies and knitwear have been impacted, in part, by the milder than expected weather.”
Online sales in particular have suffered, whilst store sales have been slightly better than predicted.
Joules said the sales woes meant its working capital position had taken a knock and it is also in talks with Joule and its lending banks over a possible “bridge financing proposal”.
Despite the ongoing trading and financing problems, Joules insisted it had made “good progress” on its turnaround plan.
It added: “Under the leadership of Tom Joule, in his capacity as product director, a new product design and development process is in place to drive further substantial improvement in product quality and design”.