Joules Plunges Amid Profit Warning, Brand Seeks Debt Relief


Joules Group Plc shares plunged after the British retailer warned it will make a loss for the full year and said it was in negotiations with banks to waive debt covenants.

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Joules Group Plc shares plunged after the British retailer warned it will make a loss for the full year and said it was in negotiations with banks to waive debt covenants.

The clothing chain said trading has softened “materially” in recent weeks as sales of key categories like coats, rain jackets, knitwear and Wellington boots fell during the recent heatwave, in a statement Friday. Joules expects to report a loss in the full year, “significantly below current market expectations”.

Joules stock fell as much as 41% in early trading. 

Earlier this year the company issued a profit warning and Chief Executive Officer Nick Jones announced his departure. The retailer is in talks with Next Plc, which could become a minority shareholder with a potential equity investment of about £15 million ($17.8 million) as Joules battles to secure its future. 

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On Friday Joules said discussions with Next are positive though there can be “no certainty” of a deal. Joules currently has £11 million of headroom under its bank facilities and has negotiated an extra £5 million to help cope with working capital requirements. The retailer expects to be able to repay its extended borrowing in November and is negotiating waiving debt covenants with its bank lenders. 

Joules started out as a clothing stall at a country show in Leicestershire in 1989 and has since grown to 125 stores across the UK with a growing presence in the US and Canada. The cost of living crisis, coupled with stock delays and freight costs have weighed heavily on the business and last month Joules hired debt advisers at KPMG to help find ways to shore up its cash position. 



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