British clothing company Joules appoints administrators – putting 1,600 jobs and 132 shops at risk 

Fashion chain Joules, beloved by Kate Middleton, Holly Willoughby and Taylor Swift has plunged into administration — putting 1,600 jobs and 132 shops at risk.

On Wednesday the British clothing company named three administrators from advisory firm Interpath Ltd after the struggling retailer failed to find investors.

The retailer has been struggling with its finances, profitability and cash generation as consumers turn cautious about discretionary spending amid a cost of living crisis.

The administrators said the business will continue to trade and shops will stay open while they ‘assess options for the business, including exploring the possibility of a sale as a going concern’.

Interpath added that it has witnessed ‘overwhelming’ interest from potential suitors to snap up the brand and its assets since revealing plans to enter insolvency.

The firm has made the move after talks over an emergency cash-call with investors, including its founder Tom Joule, were unsuccessful last week.

The posh wellies brand has counted Holly Willoughby, Kate Middleton, Prince William and Taylor Swift among its famous fans, but has become less popular in recent years, according to experts. 

The company, which employs 1,600 people and has 132 shops in Britain and Ireland, said it had appointed Will Wright, Ryan Grant and Chris Pole.

Joules added that Mr Wright and Mr Grant have also been appointed as administrators to Joules Developments Ltd and Garden Trading Company, which it bought in February last year.

Mr Wright, head of restructuring at Interpath Advisory and joint administrator, said: ‘Joules is one of the most recognisable names on the high street, with a unique brand identity and loyal customer base.

‘Over the coming weeks, we will endeavour to continue to operate all stores as a going concern during this vitally important Christmas trading period while we assess options for the group, including a possible sale.

‘Since the group’s announcement on Monday, we have had an overwhelming amount of interest from interested parties.

‘We will be working hard over the days ahead to assess this interest, but at this stage we are optimistic that we will be able to secure a future for this great British brand.’

Joules said all stores and concessions will operate as normal, while online orders will also be delivered as usual.

It added that valid gift cards can still be redeemed, but customers will no longer be able to buy new gift cards.

Customers will also be able to exchange items in stores but will no longer offer refunds following the administration.

On Monday, Joules said talks over an emergency cash-call with investors including its founder Tom Joule had failed, and 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 suspended trading of its shares on the stock market due to the decision, adding that further announcements will be made ‘in due course’. 

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. 

On Monday, experts suggested the ‘one-time darling of the outdoor set’ had also been harmed by a failure to ‘move with the times’ — prompting customers to spend their money elsewhere.

‘It had become stuck in a rut – as athleisure wear took over as the casual clothes for the younger generation and even Joules’ core customers started falling out of love with the staples of its floral and fashion ranges,’ said Susannah Streeter at Hargreaves Lansdown.

‘It can be hard for a brand based on British heritage to move with the times but Joules’ demise shows, fast moving fashion trends can cause serious damage to slow coaches. The effect of consumers tightening their belts will have caused deeper damage to the company’s furniture and accessories business Garden Trading, as spending on revamped rooms and outdoor spaces has been cut back.’ 

Despite its problems, Ms Streeter predicted there was likely to be ‘significant interest’ in acquiring the Joules brand and its intellectual property. 

‘The Joules brand is still strong, and although it will need a modern twist to help it survive longer term, there is likely to be significant interest in the name and the intellectual property,’ she said.  

Data showed the number of company insolvencies in England and Wales hit its highest level in the April to June period in nearly 13 years as surging energy prices took their toll on business.    

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.

Mr Joule founded the eponymous firm in 1989, when he began selling clothing on a stand at a country show in Leicestershire. 

It has suffered a slump in shares over the past year following profit warnings amid soaring costs and a downturn in consumer spending.

Lisa Byfield-Green, Retail Week’s data and insights director, said she expected more High Street brands to go under due to the tough economic conditions. 

‘Investors are nervous right now in the difficult economic environment. Companies are also receiving no relief from rising business rates, which puts many high street businesses in danger,’ she said. 

‘We expect to see the continuation of these difficulties into 2023. As the strain continues to mount, smaller and struggling retailers will be snapped up by larger brands (e.g. Next acquiring Made) or fall into administration. The market will diverge between success stories and those that cannot sustain the weight of the mounting cost of doing business.

‘Retailers will need to take decisive action to lean into their existing proposition and strip back operational overheads or diversify beyond retail to generate new revenue streams. Sadly, we anticipate that more retailers are likely to fall victim to the intense economic pressures.’ 

In July, the High Street fashion retailer called in advisers after a dramatic share price drop.

The posh wellies chain, which also trades online through its website, enlisted the help of major accounting firm KPMG to look at bolstering its finances. 

The firm said it has hired KPMG to help with plans to boost profits and shore up its balance sheet back in July. 

KPMG was said to be exploring options, including raising fresh capital, after inflationary pressures drained the retailer’s cash reserves.

In a statement at the time, Joules said: ‘The group continues to focus on improving profitability, cash generation and liquidity headroom.’ 

It came after the firm’s boss, Nick Jones, said would step down in the first half of its next financial year.

The company, launched in 1989 as a brand selling clothing and homeware products inspired by British country lifestyles, has like many High Street retailers suffered from a change in shopping habits sparked during the Covid lockdowns from 2020 and 2021.  

In July, the group insisted debt levels remained within its banking agreements and as expected by management.

It said: ‘Whilst the group continues to manage its cash resources carefully over its seasonal borrowing peak, it expects to have sufficient liquidity to manage its working capital requirements over this time.

‘The group is making good progress against previously announced key initiatives aimed at simplifying the business and optimising the cost base to improve long-term profitability.

‘This includes implementing significant changes to its wholesale operations to focus on fewer, profitable wholesale accounts and improving and simplifying the group’s end-to-end product process to reduce costs and shorten lead times.’

Its May trading update saw it warn that ‘challenging’ market conditions and weak consumer confidence had affected trading.

Joules added that reduced demand for full-price items had hit profit margins across its owns channels, while it said profits would be knocked by ‘subdued’ demand for home and garden products.

Third-party sales had also been weaker than expected across some key UK accounts, it said at the time. 

Earlier this year Joules said it had been severely impacted by rising costs and stock disruption in the nine weeks to the end of January.

Revenues were up 31 per cent and 19 per cent against 2021 and 2020 levels during the period, but Joules acknowledged these sales, in addition to profits, were ‘behind the board’s expectations’.

In efforts to counter ‘pressures on profitability’, Joules told investors it was practicing ‘cost restraint’ in marketing, head office and capex, liquidating ‘aged and slow-moving stock’, and simplifying wholesale operations.

The group, which sells clothes, shoes, homeware and garden furniture, had initially enjoyed a strong bounce back from lockdown conditions, boosting profit forecasts in June last year as it benefited from Britons’ desire to get back to nature and spruce up their homes and gardens during the pandemic.