MHA | Joules - Another brand collapses and fingers crossed for a good…

Joules - Another brand collapses and fingers crossed for a good Christmas season in the retail sector

November 15th 2022
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Joules which operate the Garden Trading Company (an online retailer) as well as the Joules clothing brand through 132 retail shops has informed the stock market that their shares should be suspended as they are intending to enter Administration.

Following quickly on from the failure of it is a clear sign that retailers are facing really difficult trading conditions. 1,600 jobs are at risk and it is likely that the brands will survive but the shops will be closed and the majority of staff made redundant.

The cost of living crisis, higher energy bills and interest rates rising means that the typical Joules customer is spending less money at the stores or through the website. The exceptionally hot summer also affected trade as sales of outdoor clothing suffered in 40 degree heatwaves.

Retailers are crossing their fingers that the Christmas trading season is a good one. Retailers are torn between buying too much stock and being left with high stock levels to shift in January or not ordering enough and hoping the consumers will not mind that items they want have sold out. Not being able to buy what you want can lead to negative PR via social media as well as other stores providing alternatives.

Retailers will be looking for some good news in the Chancellor’s Autumn Statement with regard to Business Rates. The Business Rates system has been prime for an overhaul for years but given the dire state of the UK economy the Chancellor may decide to hold fire on any reform of business rates until the economy is on a firmer footing.

A lot of retailers have found it easy to expand their stores network whilst conditions were in their favour but will find it harder to restructure as recession looms. Communication with stakeholders is key in a retail restructure.

Get in touch 

The Restructuring & Recovery services team at MHA MacIntyre Hudson are very experienced at dealing with retail situations so retailers should pick up the phone for advice as soon as financial problems start to occur. The earlier we are called in to look at a company the more likely it is that we can complete a successful restructure which preserves value for the shareholders.

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