Joules mulls equity raise as CVA talks continue

Troubled Market Harborough lifestyle brand Joules has revealed it is in “advanced” discussions with a number of strategic investors, including its founder Tom Joule, to provide a cornerstone investment in an equity raise.

Declining sales and spiralling costs have led the firm to consider a number of potential options in recent months, including a CVA that could ultimately mean store closures and job cuts.

This morning (7 November), Joules said its talks with Interpath Advisory were ongoing but insisted that its turnaround plans were making “good progress.”

In a statement to the London Stock Exchange, the firm said it intended to “commence consultation with key stakeholders, including suppliers” on the turnaround plan including potential alternative options, “should they be required.”

The firm added that it “remains in discussions” with its lender in relation to “the waiver of certain financial covenants in its existing facilities and on its medium-term financing, including a review of covenants, to support the turnaround plan.”

Ominously, it said its working capital position remained “below expectations.”

Joules also revealed that its overall wholesale performance had been impacted by the underperformance of its US wholesale business, but that its exit from EU and US territories was “near completion.”

The company said its net debt at the end of October was £25.7m, with headroom of £11.4m.