Fashion chain Joules is on the verge of administration – Daily Mail
Fashion retailer Joules was today preparing to appoint administrators after being hammered by soaring energy costs and a slump in consumer spending – with 1,600 jobs and 132 stores now under threat.
The brand – famous for its posh wellies – said talks over an emergency cash-call with investors including its founder Tom Joule were unsuccessful and have ended.
It said it would file a notice of intention to appoint Interpath Advisory as administrators to the firm and its subsidiaries, including online home and garden retailer The Garden Trading Company, ‘as soon as reasonably practicable’. Joules said: ‘The board is taking this action to protect the interests of its creditors.’
The firm will suspend trading of its shares on the stock market due to the decision, adding that further announcements will be made ‘in due course’. It is expected to formally appoint administrators in the next five to 10 working days, but stressed that its stores and websites are continuing to trade as normal.
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.
Joules said it planned to appoint administrators after failing to find a new investor, becoming the latest retailer to face collapse as consumer finances are squeezed
Next had also been in talks with Joules over a deal to buy a minority stake in the business, but discussions between the two collapsed in September.
Joules then revealed it was in talks over a so-called cornerstone equity raise with strategic investors including Mr Joule – who recently returned to the firm in an executive position as product director.
It was also holding discussions with Mr Joule and its lender over a possible bridge financing deal to allow the funding talks to continue, but failed to secure the crucial strategic investment needed.
At the same time, the group was considering the option of a company voluntary arrangement (CVA) – which typically involves a firm agreeing delayed or reduced payments to landlords or other creditors – as part of a restructuring to turn around its fortunes.
It has suffered a slump in shares over the past year following profit warnings amid soaring costs and a downturn in consumer spending.
Mr Joule founded the eponymous firm in 1989, when he began selling clothing on a stand at a country show in Leicestershire.
It comes as data showed the number of company insolvencies in England and Wales hit its highest level in the April-June period in nearly 13 years as surging energy prices took their toll on business.
A model wearing a Joules dress from the autumn/winter 2022 collection
The British chain is particularly well known for its posh boots
Tax rises ‘could choke growth’
Massive tax rises planned by Chancellor Jeremy Hunt could ‘choke off growth’ and trigger a deeper recession, a former Cabinet minister warned yesterday.
Simon Clarke, who was Levelling Up Secretary in Liz Truss’s government, urged ministers to focus on spending cuts rather than tax rises as they scramble to balance the books ahead of Thursday’s Budget.
Mr Clarke, who also served as Rishi Sunak’s deputy during his time at the Treasury, told Sky News: ‘I believe very strongly that with the tax burden at a 70-year high, we need to be extremely careful about further increasing the challenges facing businesses and households.’
Sources said the Budget was likely to comprise around £33billion in spending cuts and £21billion in tax rises, on top of the £32billion in tax increases announced by Mr Hunt last month.
In another sign of the headwinds facing the High Street, Marks & Spencer revealed last week it was braced to spend £100million more on energy next year.
Boss Stuart Machin wants the Chancellor to slash business rates, which are another huge burden on retailers. The projected increase in fuel costs next year follows a £40million increase this year, denting profits.
Store chains are increasingly fearful over spiralling costs – made even worse by a hike in business rates, which are due to rise 10 per cent next year, leaving companies to pay an extra £2.7billion in total.
Machin, credited with playing a major role in the fashion and food group’s ongoing revival, wants an overhaul of the business rates system.
He branded the current levy ‘daylight robbery’.
The slump in consumer confidence may be around for some time, with average energy bills set to rise by £900 as the government’s cap ends and council tax almost certain to soar.
Chancellor Jeremy Hunt is poised to confirm the end of the blanket subsidies on energy prices when he delivers a grim Autumn Statement on Thursday.
It will be part of an ‘eye-watering’ package of savings and tax rises to fill a black hole of up to £60million in the government finances.
The estimated £3,000 energy bill cap from next spring is £500 above the current ‘guarantee’ introduced by Liz Truss, which was originally supposed to last for two years, and almost treble the £1,042 average in April 2020.
Data shows the number of company insolvencies in England and Wales hit its highest level in the April-June period in nearly 13 years as surging energy prices took their toll on business.
The slump in consumer confidence may be around for some time, with average energy bills set to rise by £900 as the government’s cap ends and council tax almost certain to soar
Chancellor Jeremy Hunt is poised to confirm the end of the blanket subsidies on energy prices when he delivers a grim Autumn Statement on Thursday
Sources told the Mail that a £400 one-off payment reducing bills for all households this winter will not be repeated, leaving millions facing an average rise of £900 in total – an extra £75 per month.
Meanwhile, the requirement for town halls to hold a local referendum when they are bring in council tax rises above 2.99 per cent is expected to be dropped – paving the way for bigger increases.
The Tory backlash to the cuts and tax rises is already under way, with dozens of Tory MPs slamming the idea of reducing education funding as ‘indefensible’.
In a letter, 28 MPs warned it ‘would not be morally right’ in the wake of school closures amid the pandemic.
However, Rishi Sunak said there was no option about ‘putting our public finances on a sustainable trajectory’, suggesting that otherwise there would be a repeat of the market meltdown that followed the disastrous mini-Budget.
Mr Hunt, who dubbed himself ‘Scrooge’ yesterday, said universal support would continue to help families next year but added ‘there has to be some constraint’ before warning that ‘sacrifices’ were required across the board to get the economy back on track.
The UK economy shrank by 0.2 per cent in the second quarter of the year, according to the ONS
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