Troubled fashion retailer Joules is considering filing for bankruptcy to cut its overheads and stave off collapse.
Sky News has learned that Joules is working with Interpath Advisory on a voluntary company agreement (CVA) which, if approved, would pave the way for store closures, rent cuts and job cuts.
A retail industry insider said Thursday that Joules has not yet formally decided to launch a CVA, or restructuring plan — an alternative mechanism that allows troubled companies to renegotiate their liabilities — but is considering the possibility “seriously.” consider”.
The option came weeks after talks with Next about a cash injection were called off.
Joules, which employs more than 1,000 people and trades in about 130 branches, said earlier this month that it is “continuing to assess ongoing funding needs and is considering alternative options, including a potential capital increase, to allow the company to expand its balance sheet.” strengthen”.
However, analysts and shareholders have cast doubt on its ability to raise equity due to the catastrophic stock price plunge.
As of Thursday afternoon, shares were trading around 7.48p, giving the company a market cap of just £8.4m.
The details of any CVA proposal are unclear and would require creditor approval.
A source indicated that this would likely result in a significant reduction in Joules’ store space and workforce.
Joules said in August it was aiming to secure a share investment of around £15m after warning it would deliver a bigger loss than previous market expectations.
In addition, Jonathon Brown, a former manager at John Lewis and Kingfisher, has been appointed as the new CEO.
The company has hired KPMG to help with efforts to improve “profitability, cash generation and liquidity headroom.”
It has also agreed an expansion of banking facilities with its main lender, Barclays, that would limit its ability to pay dividends.
Joules has been listed on the London Stock Exchange since 2016 after being listed in 1989 by Tom
Joule started out selling clothes from a country show stall in Leicestershire.
Mr. Joule is now a non-executive director of the company.
Joules plans to report its full-year results next month.
(c) Sky News 2022: Troubled retailer Joules investigates CVA to avert collapse