Fashion retailer Joules confirmed it has called in advisers to look at bolstering its finances as soaring costs and waning consumer confidence hit the group’s bottom line.
The posh wellies chain said it has hired KPMG to help with plans to boost profits and shore up its balance sheet as reports suggest it is considering raising fresh capital.
Joules announced in May that its boss, Nick Jones, would step down in the first half of its next financial year while warning of the impact on profits of the cost-of-living crisis.
Its share price has plummeted by nearly 90% over the past year, with declines compounded by the profit alert and cash crunch worries.
Joules said: “The group continues to focus on improving profitability, cash generation and liquidity headroom.”
It said it has hired KPMG’s debt advisory practice “to assist in this process”.
But the group insisted debt levels remain within its banking agreements and as expected by management.
It said: “Whilst the group continues to manage its cash resources carefully over its seasonal borrowing peak, it expects to have sufficient liquidity to manage its working capital requirements over this time.
“The group is making good progress against previously announced key initiatives aimed at simplifying the business and optimising the cost base to improve long-term profitability.
“This includes implementing significant changes to its wholesale operations to focus on fewer, profitable wholesale accounts and improving and simplifying the group’s end-to-end product process to reduce costs and shorten lead times.”
Its May trading update saw it warn that “challenging” market conditions and weak consumer confidence have affected recent trading.
Joules added that reduced demand for full-price items had hit profit margins across its owns channels, while it said profits would be knocked by “subdued” demand for home and garden products.
Third-party sales had also been weaker than expected across some key UK accounts, it said at the time.