Next abandons Joules takeover talks
Talks between Joules and Next over a £15 million equity investment in the struggling clothing and homeware retailer have ended, sending its shares down to fresh lows.
The setback comes a fortnight after Joules insisted talks were proceeding positively despite reports that negotiations were faltering.
Joules said yesterday it “continues to assess its ongoing financing requirements and is considering alternative options, including a possible equity raise, to allow the company to strengthen its balance sheet”. It added: “A further announcement will be made if and when appropriate.”
Shares in Joules, which were trading at more than 300p in June last year, slumped by 49.6 per cent, or 10¼p, to 10½p, valuing the company at only £11.7 million, while Next closed down 3.9 per cent, or 236p, at £58.28, amid a broader decline on the London stock market yesterday.
Joules did not state the reason for the breakdown in investment talks. Sky News reported last month that talks had stumbled after a trading warning from Joules on August 19 and over providing sufficient data for due diligence. Joules had blamed the heatwave for weakening sales of wellies and other wet-weather gear.
The end of the talks coincided with Jonathon Brown, a former Compare The Market chief executive, formally taking charge as Joules’s new chief executive, replacing Nick Jones.
Tom Joule, the founder and a non-executive director, has been given the job of leading, in an executive capacity, a “renewed product development process for the forthcoming seasons”, Joules said yesterday.
Joules said its outlook for the full year remained unchanged and its turnaround plans remained focused on better pricing and promotions, and on more profitable product categories with a shorter time to market.