Key points:
- Joules releases a response to recent speculation
- The struggling retailer says a CVA is one of several options
- At the time of writing, Joules shares are up 2.1%
Struggling retailer Joules Group initially rose Monday morning, following the company's response to speculation regarding its future.
The company told investors that a company voluntary arrangement (CVA) is one of several “potential options” it may choose in an attempt to kickstart a recovery for the lifestyle retailer, which has run into difficulties.
Around a week or so ago, Sky News reported that Joules is mulling turning to an insolvency procedure in order to cut its overheads and avert collapse.
The report stated that the retailer is working with Interpath Advisory on a CVA that, if approved, would potentially result in store closures, job cuts and rent reductions.
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In its note on Monday morning, Joules stated it “continues to make good progress in developing its turnaround plan” in a bid to drive higher profitability.
Joules said it is focusing on a better pricing and promotional strategy, looking at more profitable product categories with shorter time to market, while also attempting to optimise the company's channel mix. In addition, it said it “continues to make good progress on its simplification agenda and cost management process.”
Furthermore, Joules continues to assess its options, including a “possible equity raise,” to allow the company to “strengthen its balance sheet and provide a strong platform to support the turnaround plan.”
The company added that while this remains its focus, it also “continues to consider a range of other potential options,” with a CVA one of several such alternatives. However, it noted that it has not determined if such alternatives are required.
On Friday, it was reported that the owner of Stoneacre Motor Group, Richard Teatum, purchased an 8.9% stake in Joules. The purchase was revealed in a regulatory filing late Thursday. In addition, Bloomberg reported that Teatum is “open to considering injecting more capital into the retailer.”
Joules shares rose 4% early in the session. In 2022, they have tumbled over 93%.