Struggling retailer Joules has revealed talks with investors including founder Tom Joule to inject cash into the business as sales continue to disappoint.
The group said Mr Joule – who recently returned to the firm in an executive position as product director – is among a number of “strategic investors” in discussions to provide a “cornerstone investment in an equity raise”.
It said it was also continuing to explore a possible company voluntary arrangement (CVA) restructuring – typically seeing a firm agreeing delayed or reduced payments to landlords or other creditors – as trading remains under pressure, with sales for the 11 weeks to October 30 lower than expected and profit margins taking a hit due to discount sales.
Joules said: “The group believes this, in large part, reflects the challenging UK economic environment which has negatively impacted consumer confidence and disposable income.
“In addition, whilst dresses, menswear and more formal product categories have performed well, larger core categories such as outerwear, wellies and knitwear have been impacted, in part, by the milder than expected weather.”
The brand – famous for its posh wellies – said online sales in particular have suffered, while store sales have been slight better than predicted.
Joules said the sales woes meant its working capital position had taken a knock and it is also in talks with Mr Joule and its lending banks over a possible “bridge financing proposal”.
It was recently reported that the owner of Yorkshire-based car dealership Stoneacre Motor Group has snapped up £1 million of shares in Joules and was considering a rescue bid.
The Leicestershire-based chain employs around 1,000 people and runs around 130 stores.
Despite the ongoing trading and financing problems, Joules insisted it had made “good progress” on its turnaround plan.
It added: “Under the leadership of Tom Joule, in his capacity as product director, a new product design and development process is in place to drive further substantial improvement in product quality and design”.