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Next ceases discussions with Joules for equity stake acquisition

Sophie Smith
13 September 2022

Joules has confirmed that discussions about Next acquiring an equity stake in the group have ceased, with discussions regarding Joules adopting the Next Total Platform continuing. The announcement led to a near 50% slump in Joules shares today.

Joules confirmed at the start of August that it was in talks to sell the stake to Next in a move that could raise £15 million.

Next had later reportedly decided to cool its plan to acquire a 25% stake in Joules, following a profits warning from the premium fashion and lifestyle retailer.

Joules currently expects to deliver a full year loss before tax, and before adjusting items, below current market expectations. The British lifestyle brand said that the recent extremely warm and dry summer weather has adversely impacted its full price sales of core categories such as outerwear, rainwear, knitwear and wellies.

With Joules' outlook for the full year unchanged, the group has now said it continues to assess its ongoing financing requirements and is considering alternative options, including a possible equity raise, to allow the company to strengthen its balance sheet.

The group also plans to develop its strategy and turnaround plan. This focuses on driving higher profitability through a better pricing and promotional strategy, focusing on more profitable product categories with shorter time to market, optimising the group's channel mix and continuing to focus on cost control.

In a statement, Joules said: "The company has an ongoing positive relationship with Next, successfully selling Joules products through Next's Label channel which will continue.

"Tom Joule, the company's Founder and Non-Executive Director, will lead the company's renewed product development process for the forthcoming seasons to oversee the company's product offer and to ensure it surprises and delights our customers."

Shares in Joules slumped by almost 50% to 10.4p following the announcement of the news today.

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