In a £41 million transaction, Next has partnered with the creator of the defunct fashion retailer Joules to save it from administration, preserving approximately 100 stores and 1,450 jobs.
According to sources, Next made a last-minute offer early on Thursday morning that beat out one made by the South African company Foschini Group, which owns Hobbs and Whistles.
It is also believed that Marks & Spencer and Mike Ashley’s Frasers Group are interested in Joules, a brand best known for its jackets and patterned wellington boots.
The bulk of employment, including those at the corporate headquarters, will remain at the about 100 Joules locations that Next planned to manage going forward, while 24 stores will close, resulting in the loss of nearly 130 jobs. On Thursday, 19 of the stores will be closed by administrators from Interpath Advisory.
Joules called in administrators last month, putting 1,600 jobs and the future of its 132 shops at risk
After failing to acquire emergency funds, Joules called in administrators last month, endangering 1,600 employment and the viability of its 132 stores. Retail restructuring experts Interpath Advisory claimed they would “evaluate possibilities for the business,” stores have continued to operate.
“Following a highly competitive process, we are thrilled to have achieved this transaction which guarantees the future of this great British brand, as well as safeguarding a considerable number of jobs,” said Will Wright, head of restructuring at Interpath Advisory and joint administrator.
Joules has struggled with declining sales for months. The company has blamed the slowdown in business on the rising cost of living and the UK’s dry and hot summer, which lowered demand for their upmarket wellies.
In the last 12 months, the value of Joules shares fell by 95% to 9.22p, at which point trading was halted and administrators were appointed. The company’s market worth at that pricing was £10.3 million, or around a fourth of what it was when it debuted on London’s Aim junior stock market in 2016.
In 1989, Joule established the business and began selling branded apparel and accessories at outdoor events. He produced his own brand of pink wellington boots, which were promptly sold out, after realising the rural set preferred vibrant clothing than dowdy tweeds.
Administrators from Interpath Advisory to close shops
The Joules website will progressively be connected to Next’s Total Platform business, which currently offers services for popular companies like Gap and Victoria’s Secret for whom Next has the UK rights.
The CEO of Next, Simon Wolfson, stated: “We are delighted to see what can be accomplished through the marriage of Joules’ great product, marketing, and brand-building skills with Next’s Total Platform infrastructure.”
According to Next, it has acquired the majority of the assets of the store, including paying £7 million for Joules’ headquarters in Market Harborough. The retailer’s founder, Tom Joule, will retain a 26% ownership position.
The corporation must now “live up to the high standards [its customers] desire in design, quality, and [service],” according to Tom Joule.
He stated, “I’m really looking forward to motivating teams with clear direction to spark and recapture the customer’s imagination again.
“I’m very happy that we were able to reach an agreement that safeguards the company’s future for all of its devoted customers, workers, and the municipality of Market Harborough, which have all played such an important role in Joules’ success.”
On Thursday, the 19 Joules locations will permanently close.
- Carmarthen
- Cheltenham
- Chichester
- Edinburgh
- Exeter
- Gateshead
- Lyme Regis
- Newbury
- Northcote Road, south London
- Oxford
- Peak Village, Derbyshire
- Peterborough
- Reigate
- Salcombe Fore Street
- Sherborne
- Southwold Little Joule
- St Davids
- Waterloo station, London
- Watford
Cost of living
The most recent brand to be acquired by Next following issues is Joules. After Made.com entered administration last month, Next acquired the name, website, and intellectual property of the furniture store.
As part of a deal that saw the rest of the company purchased by a group of financing firms in April, Next acquired a 44% share in the baby products retailer JoJo Maman Bebe.
As living expenses rise, there are worries that other retailers may also face difficulties. High Street behemoth Marks and Spencer has issued a warning about a “gathering storm” of rising company costs and pressure on consumer finances, saying that “all sectors” of retail will be impacted.
Read more: Traidcraft falls into administration
With over three decades of experience in the business and turnaround sector, Steve Jones is one of the founders of Business Insolvency Helpline. With specialist knowledge of Insolvency, Liquidations, Administration, Pre-packs, CVA, MVL, Restructuring Advice and Company investment.