Next in talks to take £15m stake in Joules

Retail giant Next could be set to take a 25% share in struggling lifestyle outlet Joules.

Over the weekend, Sky News said that Next has been in talks “for several weeks” over taking the major stake in its smaller, Market Harborough-based counterpart, but that any announcement – if it comes – is still “some weeks away”.

This morning (August 8), Joules confirmed the talks had been taking place. In a statement, the company said: “Joules confirms that it is in discussions with Next about adopting its Total Platform services to support the group’s long term growth plans. Additionally, in conjunction, Joules confirms it is in discussions with Next about a potential equity investment raising proceeds for Joules of around £15m at no less than Joules’ current market price, which would result in Next becoming a strategic minority shareholder in the group. The equity investment would be subject to approval by Joules’ shareholders.

“There can be no certainty these discussions will lead to any agreement. A further announcement will be made if and when appropriate.”

Last month, Joules’ share price reached historic lows after it admitted appointing KPMG in order to shore up its cash position.

Joules’s share price has slumped dramatically since the start of the year, when it was trading at around the 144p mark. At close on trading on Friday, it was down to just 33p.

On May 4, Joules issued a profit warning after saying the cost of living squeeze was impacting sales across its full-price and gardening products.

The firm also revealed that CEO Nick Jones is to step down after three years in the role.

Meanwhile, Next is facing an investigation by HMRC after its new payroll system led to thousands of staff receiving incorrect salary payments, according to The Sunday Times.

Next swapped its in-house payroll software with a platform from US group Oracle at the start of the year, which led to an increase in both underpayments and overpayments to weekly- and monthly-paid staff

Now, HMRC is investigating whether Next paid some of its staff less than the UK’s statutory minimum wage – £9.50 an hour for those aged 23 and over.

Next confirmed that it is being investigated by HMRC and that it has been tagged as a “medium-risk” corporate taxpayer rather than a low-risk one.

The company said it had so far found no evidence that staff had been paid less than the minimum wage.

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