Clothing and homeware group Joules Group (LON: JOUL) announced Monday morning that it plans to appoint administrators after talks regarding a potential rescue broke down.
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In a move that could mean around 1,600 jobs are at risk, the Leicestershire-based company said it was making the decision after discussions with various parties to provide a cornerstone investment in an equity raise process or regarding a bridge financing proposal fell through.
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Joules, which has 132 shops, said last week that trading for the 11 weeks to October 30 was behind expectations. The company added that the underperformance was due to the challenging UK economic environment, which had negatively impacted consumer confidence and disposable income, while e-commerce sales were also behind expectations due to softer web traffic, and sales of outerwear, wellies, and knitwear were impacted by the milder than expected weather.
The company’s shares fell significantly following the update last week, closing over 23% lower.
Joules becomes the latest retailer to run into trouble after Made.com fell into administration last week. Soaring inflation has squeezed consumer spending, resulting in a number of retail firms warning of headwinds stemming from higher costs.
As a result of Joules’ move, the company said it has requested a suspension of trading in its ordinary shares on AIM with effect from 07.30 am today.
