(Sharecast News) - Joules confirmed on Monday that it has appointed KPMG debt advisory to help improve profitability, sending shares in the fashion retailer tumbling.
Responding to a press report over the weekend, Joules said that as set out in its May trading update, it continues to focus on improving profitability, cash generation and liquidity headroom.
As at 29 May, it had net debt of £21.4m, giving £11.3m headroom within its banking facilities, in line with the board's expectations.
"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," it said.
"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."
The statement came after the Sunday Times reported that Joules had called in advisers from KPMG to help shore up its cash position as the cost-of-living crisis saps demand on the high street. The Times said consultants from KPMG's debt advisory practice were said to be exploring options, including raising fresh capital, after inflationary pressures drained the retailer's cash reserves.
At 0850 BST, the shares were down 18.6% at 27.00p.
