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Joules share slide reportedly throws Next rescue into doubt

By Rachel Douglass

29 Aug 2022

Business

Image: Joules

A further drop in Joules’ share price has reportedly put its rescue deal from Next into doubt.

The struggling British retailer was hoping to secure a 15 million pound equity investment from Next, however, according to Sky News, its most recent profit alert has raised concerns.

The publication said that the two companies are not close to agreeing the terms of an investment, just three weeks after they confirmed discussions.

Sources added that Next had not yet received sufficient financial information in order to make a formal proposal, with further doubts surrounding Joules’ initial valuation of 33 pence-a-share or more, as it revealed earlier this month.

Since then, shares have continued to decline, closing on Friday at 25.5 pence.

Discussions to go ahead

Despite uncertainty, a spokesperson for Joules told Sky News that it is continuing to have “positive discussions” with Next about adopting its Total Platform services to support its long-term growth, as well as a potential equity investment.

The statement continued: “There can be no certainty that these discussions will lead to any agreement, and further announcements in this regard will be made if and when appropriate.”

The investment’s announcement comes following a difficult period for Joules, which has struggled due to inflationary pressures within retail.

Last month, the heritage brand appointed debt advisory firm KPMG to assist in improving its profitability and liquidity headroom.

Earlier in August, it announced the appointment of former John Lewis exec Jonathon Brown as its CEO, who said in a statement at the time that the group was making “strong progress against its clear plans to improve profitability by simplifying the business and optimising the cost base.”

Sky News said Next declined to comment.

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