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Joules Group PLC
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Joules explored the possibility of restructuring through a CVA before entering administration but was ultimately unable to secure funding, according to proposals recently filed by Joint Administrators Ryan Grant, Will Wright and Chris Pole of Interpath.
Joules Group PLC is the AIM-listed holding company of the Joules Group, a giant fashion retailer of lifestyle clothing, related accessories and homeware, which it sold through its trading subsidiaries, including Joules Limited.
In July and August 2022, the Company issued profit warnings, reporting significant pressure on gross margins with consumer appetite being weighted towards discounted products.
Although efforts were made to improve profitability by simplifying the business and optimising the cost base, the business continued to experience challenging trading conditions due to high-cost inflation coupled with significant rises in shipping costs and ongoing supply chain disruptions.
The Group explored options for a turnaround, including an equity raise from a number of strategic investors and the feasibility of a CVA in Joules Limited.
The Company obtained support for a CVA from a significant number of key creditors, but was ultimately unable to secure the requisite funding from strategic investors required to implement the CVA.
Accordingly, on 14 November, the directors filed a notice of intention to appoint administrators, and engaged Interpath to market the business for sale on an accelerated basis.
On 1 December, the Joint Administrators completed the sale of the majority of the Group’s business and assets to a joint venture company set up by retailer Next and Tom Joule.
The Joint Administrators anticipate that secured creditor Barclays Bank plc will be repaid in full. HMRC and secondary preferential creditors may receive a dividend from certain of the companies’ estates.
The Joint Administrators have been assisted by Shoosmiths.