(Sharecast News) - Retailer Joules has decided to call in administrators after failing to raise new funding, putting around 1,700 jobs at risk.
The company had announced last week that it was in advanced talks with a number of strategic investors to provide a cornerstone investment in an equity raise process. It also said it was in discussions about a potential bridge financing proposal.
"The board confirms these discussions with various parties have not been successful and have now terminated," it said on Monday.
As a result, the board has decided to appoint Will Wright, Ryan Grant and Chris Pole of Interpath Advisory Limited as administrators for Joules, and Will Wright and Ryan Grant to The Garden Trading Company Limited and Joules Developments Limited "as soon as reasonably practicable".
"The board is taking this action to protect the interests of its creditors," it said.
Shares in the company have been suspended from AIM.
Independent retail analyst Nick Bubb said: "Well, at Friday's close of circa 9p, Joules was capitalised at just £10m, so its fall from grace has been alarming (the IPO price in May 2016 was 160p and it peaked at over 300p), but no doubt Next will be poised to pick up the pieces..."
Victoria Scholar, head of investment at Interactive Investor, said: "Joules is the latest victim of the UK's retail crisis as the demise of the high street and the cost-of-living crisis bite. Just last week Made.com entered into administration after the interior design and DIY pandemic boom faded post covid, along with its furniture sales.
"Joules has been struggling with the squeeze on household budgets after the pandemic and the war in Ukraine boosted inflation, supercharging the cost-of-living, leaving far less money left over for households to spend on retail. On top of that retailers including Joules have been grappling with the rising cost of everything from materials to workers' wages to energy bills."
Russ Mould, investment director at AJ Bell, said: "As a business Joules is now less a posh welly and more an old boot with a hole in it. The retailer has been struggling for some time, but it is still a jolt to see it enter administration.
"Lots of things have led us to this point, with the failure of Next to come to the rescue the straw that broke the camel's back, but ultimately Joules' proposition wasn't robust enough to withstand such a bleak economic backdrop.
"Joules is neither a luxury brand nor does it offer compelling value and the premium high street space looks particularly vulnerable in an environment when there is so much pressure on household budgets.
"This has been compounded by some poor decision making, unhelpful weather - though blaming the weather is never a great look for a business - and supply chain problems.
"Joules' cash and stock management have also been far from perfect, though it is fair to acknowledge the current storm would have tested even the most robust balance sheet."
