(Alliance News) - Joules Group PLC shares slumped on Tuesday after the firm announced that talks with blue-chip retailer Next PLC over a potential investment have been unsuccessful.
The Leicestershire, England-based country lifestyle retailer said it is still in talks with Next over adopting its Total platform, however. The Total Platform allows brands to use Next's large-scale IT, warehousing and distribution infrastructure for their own e-commerce operations.
Joules shares were 45% lower at 11.46 pence each in late trade in London on Tuesday. Next's shares were 3.6% lower at 5,846.00p.
Joules also said it is mulling an equity raise in a bid to bolster its coffers.
"The company has an ongoing positive relationship with Next, successfully selling Joules products through Next's Label channel which will continue," Joules said.
"The group continues to develop and execute its strategy and turnaround plan, which focuses on driving higher profitability through: a better pricing and promotional strategy; focusing on more profitable product categories with shorter time to market; optimising the group's channel mix; and a continuing strong focus on cost control. The group's outlook for the full year remains unchanged."
In addition, Joules said it has turned to founder Tom Joule, a current non-executive, to lead the firm's "renewed product development process". Joule will lead in an executive capacity, the company said.
Joules added: "The group continues to assess its ongoing financing requirements and is considering alternative options, including a possible equity raise, to allow the company to strengthen its balance sheet."
The company in August said it was in talks with Next about a GBP15 million cash injection. It would have seen Next become a "strategic minority shareholder".
However, fears that the talks would amount to no investment have hung over Joules since late-August. Sky News reported the two companies were not close to agreeing the terms of an investment, and Next had not received enough financial information to allow it to make a formal offer to the Joules board.
By Eric Cunha; ericcunha@alliancenews.com
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