Next in talks to take £15m in struggling chain Joules | Next

Next is in talks to take a £15m stake in struggling retailer Joules.

Joules, whose share price has fallen by almost 90% in the past year, said it was in talks with Next to raise the sum in a deal that would see the clothing and home goods retailer take a strategic minority investment in the company.

Under the terms of the deal, Next can take a stake of around 25%, according to Sky News.

“Joules confirms that it is in discussions with Next about a potential equity investment that provides proceeds for Joules of around £15 million at no less than Joules’ current market price, which would result in Next becoming a strategic minority shareholder in the group,” the company confirmed. in a statement on Monday.

“The share investment will depend on the approval of Joules’ shareholders. There is no certainty that these discussions will lead to any agreement.”

Last month, Joules hired KPMG to help with efforts to improve “profitability, cash generation and liquidity freedom.”

Joules, which has around 130 stores and employs more than 1,000 people, also announced it was in talks to use Next’s online platform to run its digital business. Next already sells Joules clothing through its own website.

The agreement will involve the transition of Joule’s existing online operations, warehouse, distribution and logistics to use Next’s services, the Total Platform, to run retail websites and back-end operations.

“Joules confirms that it is in discussions with Next to adopt Total Platform services to support the group’s long-term growth plans,” the company said.

Next has struck similar online services joint-ventures with companies including Reiss and Victoria’s Secret.

In April, Next and a group of investment firms took control of maternity and baby clothing retailer JoJo Maman Bébé.

Last week, Next said it expected to make £10m more in annual profit than previously thought after a rise in sales of suits and summer outfits boosted sales.

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The company said full-price sales rose a better-than-expected 5% in the three months to July 30, but warned it expected growth to slow to 1% in the second half of the year as the cost-of-living crisis hit customers’ budgets .

The first-half sales result saw Next lift its full-year profit to £860m, ​​which would be 4.5% higher than last year.

Joules has been listed on the London Stock Exchange since 2016, having been founded in 1989 when Tom Joule started selling clothes from a display stall in the Leicestershire countryside.

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