Joules still owes over £100m as creditors set to miss out
Joules, the lifestyle brand which was bought out of administration last year by Next, still owes over £100m to creditors, according to documents seen by TheBusinessDesk.com.
According to an update from administrators, Joules’ unsecured creditors will only get between 12-15p for every pound owed to them.
Next saved the Joules brand on 1 December last year as it, along with Joules founder Tom Joule, made a last-minute £34m swoop for around 100 stores, saving over 1,400 jobs.
Joules’ secured creditor, Barclays, has received the £32.1m owed to it, as will HMRC, which was owed £5.9m when the firm collapsed.
Joules’ woes started on December 14 2021, when it issued a profit warning after suffering from supply chain issues, a labour shortage and higher costs during the first half of its financial year.
The same day, Joules’ share price fell by 27% on early trading, with investors spooked by the profit warning issued to the London Stock Exchange.
The new year brought little respite as the firm issued its second profit warning in three weeks on January 2, again citing supply chain issues and the (then) new Omicron variant pushing down footfall in its stores. Again, that morning, the firm’s share price crashed, dipping to 70p.
On February 8 last year came more bad news. In the 26 weeks to November 28, Joules saw profit before tax fall from £3.7m to £2.6m, despite revenues rising by 35% to almost £128m.
Joules put this down to the end of government Covid support, increased wage costs because of a labour shortage in its third-party distribution centre and increased digital marketing costs, which saw operating expenses rise by almost 53% to £52.2m.
By May, Joules was reeling again, with the news that Nick Jones was set to step down as CEO after three years at the helm. At the same time, the company said market conditions had become “more challenging” – with the rising cost of living blamed.
Come August, and The Sunday Times was reporting that Joules had called in KPMG to help with shoring up its cash position. The firm’s share price was now reaching as low as 33p.
However, later that month, a rare bright spot. Joules revealed that it had landed a further £5m of debt from Barclays and that it expected its full year adjusted profit before tax to be slightly ahead of expectations.
By August, Joules was in talks with eventual saviour Next over a £15m deal that would see the Enderby retail giant take a 25% stake in the business. Meanwhile, former Coca-Cola man Jonathon Brown was named as Joules’ new CEO.
Another profit warning followed later that month – enough for Next to abandon their planned investment.
While a CVA had been mooted, Joules finally called in administrators from Interpath Advisory in November, while South Africa-based Foschini Group mulled a rescue bid.
On December 1, Next made a last-minute, successful bid for Joules, saving hundreds of jobs in time for Christmas.
