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Trading in the shares of Joules Group PLC was suspended on Monday, as the cash-strapped retailer said refinancing discussions have failed, and it will call in administrators.
The AIM stock had dropped by a quarter on Monday last week, after the British lifestyles brand warned that trading underperformance had left its finances in a precarious state. Joules shares have lost practically all their value over the past 12 months, amid a series of profit warnings and failed talks for an investment by larger peer Next PLC.
Joules on Monday said that, to protect the interests of its creditors, its board had decided to file a notice of intention to appoint administrators. For the parent company and trading arm Joules Ltd, these will be Will Wright, Ryan Grant and Chris Pole of Interpath Advisory Ltd. For Garden Trading Co Ltd and Joules Developments Ltd, they will be Wright and Grant.
The Leicestershire, England-based country lifestyle retailer last week said it was in talks with founder Tom Joule and its lender about obtaining a bridge loan, as recent weak trading had left its working capital position below expectations.
However, on Monday, it said those discussions "have not been successful and have now terminated."
Joules previously had said that its net debt stood at £25.7 million at the end of October, leaving headroom of £11.4 million.
However, Joules said this headroom was reduced by £5.6 million, representing 'trapped cash', which is cash held in transit by payment providers and others. Headroom also will be reduced by a £5 million repayment of the company's short-term revolving credit facility, due on November 30. That leaves just £800,000 in headroom.
Joules had said that overall trading for the 11 weeks that ended October 30 had been below company expectations. It said this was partly due to economic uncertainty in the UK and partly due to mild weather, which reduced demand for outerwear, boots and knitwear.
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