Joules share price rebounds as Next rides to the rescue
The share price of Market Harborough lifestyle and fashion retailer Joules has risen sharply today on the back of news that fellow Leicestershire firm Next could be set to take a 25% equity stake in the business.
At lunchtime today (August 8), Joules shares rose to 47p each – up 14p, or over 42% on their opening price – to their highest level since May.
Despite this, Joules’ share price is still almost 66% down since the start of the year, showing how much ground the firm has to make up should Next come to its aid.
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.