Troubled fashion brand Joules will shut 19 shops and axe 133 jobs after it was bought by retail rival Next and founder Tom Joule.
Next said it plans to continue to run around 100 of Joules’s 124 stores and transfer over around 1,450 shop and head office workers. The deal will see Next own a 74% stake in the business, with Tom Joule owning the remaining 26%.
The Joules Group had been on the brink of collapse after it failed to secure new investment putting 1,600 jobs at risk. It revealed it was to file a notice of intention to appoint administrators after a failure to secure a cash injection.
The company drafted in experts from Interpath Advisory last month after failing to secure emergency funding following a surge in costs and slowdown in demand. Next and Tom Joule beat competition from South African firm Foschini Group, which owns the Whistles and Phase Eight brands.
Joules has been bought for £34 million, with Next also snapping up Joules’s head office in Market Harborough for £7 million. Chief executive officer Jonathon Brown will continue to lead Joules, with Next saying the brand will retain management autonomy.
Next said most Joules staff will remain with the business in the long term and confirmed plans to shift Joules on to its Next Total platform system.
What has been said about the takeover?
Tom Joule said: “After three years away from the operational side, I’m truly looking forward to inspiring teams with clear direction to excite and recapture the imagination of the customer again. I’m so pleased that we have been able to strike a deal that protects the future of the company for all its loyal customers, its employees and also for the town of Market Harborough, which have been so central to Joules’s success.”
Will Wright, joint administrator and head of restructuring at Interpath, said: “We are pleased to have concluded this transaction, which secures the future of this great British brand, as well as safeguarding a significant number of jobs. To have achieved this in such a short timetable is testament to the support we’ve received from employees, suppliers and other key stakeholders throughout the administration process, so we’d like to express our profound thanks to everyone involved.”
Next chief executive Lord Simon Wolfson said: “We are excited to see what can be achieved through the combination of Joules’s exceptional product, marketing and brand building skills with Next’s Total Platform infrastructure.”
Which Joules shops will close?
The following 19 stores will close on Thursday (1 December):
- Lyme Regis
- Northcote Road
- Peak Village
- Salcombe Fore Street
- Southwold Little Joule
- St Davids
Why was Joules in administration?
Announcing the administration last month, Joules said in a company statement: “On 7 November 2022, the company announced it was in advanced discussions with a number of strategic investors to provide a cornerstone investment in an equity raise process. The company also announced it was in discussions regarding a bridge financing proposal in order to enable continued progress to be made with the re-financing plans referred to above. The board confirms these discussions with various parties have not been successful and have now terminated.
It said trading has been weaker than expected: “The challenging UK economic environment which has negatively impacted consumer confidence and disposable income.” It added that sales of “outerwear, wellies and knitwear” had been hit by milder-than-expected weather.
Joules is the latest retailer to hit the buffers after online furniture business Made.com collapsed last week, with rival Next buying up its brand, websites and intellectual property. The deal led to 320 redundancies at Made, while a further 79 employees who had already resigned and were working out their notice were forced to leave the business immediately.
What are customer rights when a company goes into administration?
Lisa Webb, consumer rights expert at Which?, said: “The news that Joules is entering administration will be devastating for its employees, as well as a real concern for customers with orders placed – as exercising your rights is not always straightforward in these circumstances.
“When a company is in administration, it may not accept the return of items.
“Many customers may find themselves in a situation where items have not been delivered. It is always worth trying to claim for a refund in these situations, but customers should know it is not guaranteed. The cost of repairs for faulty items could still be claimed if they came with a warranty.
“If you’ve bought something on your credit card costing more than £100, the card provider is jointly responsible for any breaches of contract.
“You can claim under Section 75 of the Consumer Credit Act if the item is faulty or not delivered.
“If you paid for goods that cost less than £100 on a credit or debit card, you may be able to claim under chargeback.”