Joules calls in advisors as cost-of-living crisis deepens

Image: Joules AW21 Lifestyle group Joules has confirmed it has appointed debt advisory firm KPMG to assist in improving profitability for the company. Joules’ statement comes as a response to an article published by The Sunday Times that said the “struggling” British firm had called in advisers to “shore up” its cash position. However, the group hit back at the report stating that it expects to have “sufficient liquidity” in order to manage its working capital requirements over the coming period. In its statement, Joules said: “As of 29 May, the group had a net debt of 21.4 million pounds, giving 11.3 million pounds 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.” KPMG has been tasked with aiding the heritage brand in improving its profitability, cash generation and liquidity headroom. Continues adapting business strategy In its recent statement, Joules noted that it was making “good progress” in terms of its previously announced initiatives which centre around simplifying the business and “optimising the cost base to improve long-term profitability”. The strategy includes implementing “significant” changes to its wholesale operations, including a focus on fewer accounts, and improving its end-to-end product process, with the priority of reducing costs and shortening lead times. The news follows a profit warning issued by Joules on May 4, with the company citing that the cost-of-living crisis was impacting its sales across its full-price range and gardening products. Joules shares have also declined dramatically since the beginning of 2022, dropping from 144 pence at the start of the year to 25,50 pence as of Monday, July 11. The slump was further heightened in May by the announcement that the group’s CEO Nick Jones was planning to exit the business during the first half of its next financial year. At the time of the announcement, Jones said Joules would continue to deliver its priorities to achieve its long-term potential, as he and the board looked to help the business “navigate the current challenging trading environment”.
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