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Given the latest Next Update, Next themselves know only too well the market conditions...so today´s news of further pressures will come as no surprise to them I wouldn't think. They would be in for this for the mid-long term
Recessions are all about taking assets from those that don't make it or having them give up stakes on the cheap..... it is like the Serengti...the hyenas are out for anyone that falls behind and gets left exposed ..only the strong survive
The best thing they can do is take the Next proposal.
Yes there will be dilution but they end up in bed with a niche retailer who knows what they are doing, get access to their platform and the forward cash situation is resolved.
Although there will be dilution the NAV will increase.
07th August 2022
" Joules confirms it is in discussions with Next about a potential equity investment raising proceeds for Joules of c.£15 million at no less than Joules' current market price, which would result in Next becoming a strategic minority shareholder in the Group"
I suppose the interesting thing are the words then of " no less than Joules' current market price " which was around 30p/33p before an up-tick.....
but..NXT wouldnt want to hold over 30% of the new enlarged share total ..and with only 112m shares at present that would be very possible if they only paid, say, 30p a share and invested £15m ...so...on a rough basis ...maybe they would pay 35p and acquire 42m shares and aim for around 25%-27% holding ...which would hardly be a "minority shareholding" though ....
by them stating a "strategic minority shareholder" it almost implies that others would take part in any equity raise as well....possibly Tom Joule himself who may well wish to keep something close to his % holding and voting rights, along with key Institutional holders ...putting the % dilution of the current total at the high end of estimations
...you do have to wonder if the existing key holders would just stand by and watch Next take such a key holding from under their noses without taking part themselves....
Equity raise seems very likely..just working out the maths of it all before the details emerge which would then be put to shareholders ( the majority of whom would already have taken part in the discussions?)
Poorly worded RNS has made the the sale much more enticing. lets see what happens from here.
28.5p sell price atm, lets see where this finishes. I hazard a guess it won't be at this price for long.
It doesn't deserve the 35% decline with Next actively still engaged in discussions for what is purported to be a 25% stake in the company.
Poorly written RNS but this doesn't deserve a 35% decline.
This will climb when investors realise.
well...traditionally Glastonbury is a washout so they probably have relied on welly sales for the glamping crowd.....this year being a drought it didnt happen !!
When I went into joules last week the collection seemed a bit drab tbh. Not the kind of summer stuff I would expect or the depth to provide sales.
For example - I wanted some shorts. Just basics. Blue. Stone. Perhaps a green. But they only had weird colours or ones with lobsters on. So I went elsewhere.
They also always seem to have a sale which is not good. A sale should be special - it isn’t dfs.
So todays announcement doesn’t come as a surprise. If we have a wet autumn and cold winter they will bounce back.
In meantime I’m kicking myself I didn’t sell on the next news - would have made a profit.
(Holding over 25,000)
I was always under the impression that sunny weather helps to drive summer range sells enourmously. Well I have learned something. So what they are saying is...that a balanced summer with rain and sun is what you want to drive optimum sells.
I am not 100% convinced.
For a long time they have managed to tap into their customers who have been living in a bubble and somehow exempt from the financial problems affecting the majority..... only to now find to their shock that the wildfires of financial hardship have encroached even these relatively well off dreamers
It is as if they became sucked into this bubble and could no longer see the real world beyond it ......only for it to come crashing down when reality knocked on their door
A good brand that did well to find and grow a customer base , but indeed of a big-boy umbrella to protect them from the vulnerability they have placed themselves in
At half price
And we are just about to turn sunny and hot weather again starting today.
My thoughts exactly, or even a bigger slice for next. Feel it’s being played
"The recent extremely warm and dry summer weather has adversely affected full price sales of core categories such as outerwear, rainwear, knitwear, and wellies ..."
Did the present BoD not anticipate that it is actually summer, people are all going on holiday for the first time in 3 years and they might have done better had they sold Joules beach towels, bikinis and beach shorts, sunglasses, sliders and flip flops.
Could be forgiven for thinking this is being delivered into Next's hands for close to where it was when talks were first disclosed. Might get nearer 29.9% now for a £15m Next investment.
Next's results were excellent so you have to wonder wtf is going on here with present the present mgt.
Joules is a good brand with a future......just got itself very badly positioned for the inflationary shock and retail downturn
Next , I am sure, will look to the future and see the opportunity to grab a slice of the brand and support it through the turbulence
It’s been a good business, just lost its way and spent too much capital to boot
Sea of blue?
As a holder of Next I feel (and hope) that Simon will have more sense than to offer an equity investment into this dog.
Maybe next or the new ceo insisted all the dirty washing was aired prior to deal. Makes the turnaround look more spectacular.
Wasn't expecting that curved ball but Next negotiations still ongoing and good riddance to the present CEO and welcome to a new one.
Apologies yes it mentions 11 weeks.
Let’s hurry up and get Wolfson on the board to sort these ******s out. As you can see I’m angry.
How after the first 5 weeks of trading the year can you predict a full year loss?
Must be a reason for it. Pretty much every clothing retailer will have had dire sales over the last 5 weeks but there not all issuing profit warnings.