Jules B seeks to restructure via CVA

Newcastle-based premium independent Jules B is looking to restructure via a Company Voluntary Arrangement (CVA) as it recovers from a year of tough trading and a ransomware cyberattack in September.

A CVA is an agreement between a company and its creditors, which sets out the plan for the repayment of the company’s debts over a fixed period. It is an alternative to liquidation, that is closing the company down.

Julian and Rhona Blades, who founded the multi award-winning menswear and womenswear retailer in 1984, intend to continue to trade and say they are looking for investors to help grow Jules B.

Last week Julian spent two days in London meeting major suppliers to explain the situation and says he was “humbled” by the sympathetic responses he received.

The CVA is being managed by restructuring specialist KSA Group. For the CVA to be accepted, 75% of the company’s creditors must agree to its proposals.

“We have had a tough year of trading in part due to the cost of living crisis and the impact of Mike Ashley’s tactics on our sector,” Julian Blades said.

“Then in September we suffered an internal ransomware attack from a company called Medusa. A substantial amount of our data was stolen, but we refused to pay the ransom demand of $100,000. We had to buy new servers, new computers, re-set everything and carefully recover and clean up our data. Our insurer declined to cover the cost. It’s been a nightmare and the impact on our cash flow was the final straw for us.”

Julian and Rhona Blades

Blades says he and his wife are the biggest creditors, being owed £1.2m by Jules B Ltd, but they are foregoing that as part of their restructuring.

“The easy option would have been to liquidate the company and walk away,” he said, “but this has been 40 years of our life and we want to keep trading. We are confident about the future of Jules B and the special relationship we have with our suppliers.”

Jules B has a womenswear unit and a menswear unit side by side in Jesmond, the prosperous suburb of Newcastle upon Tyne where it was started. It also has two shops in Kendal, Cumbria. It opened its fifth store, a womenswear unit, in Harrogate in August 2022.

Discussions with landlords are still ongoing. The business has been trading online since 2007.

In 2015 Jules B recovered from another financial crisis after discovering it had been defrauded of £1.2m by a former bookkeeper.

Jules B’s problems reflect the pressure being felt by independents trading at the premium end of the market, which is now dominated by Mike Ashley’s Flannels chain. Sunderland-based Designer Childrenswear closed down last month after around 40 years of trading, while Aberdeen indie Hanon ceased trading in October after 30 years in the city.