Key points:
- Joules Group said it is in talks with strategic investors
- Those investors include founder Tom Joule
- The company said trading is behind expectations
Joules Group (LON: JOUL) shares plunged early on Monday after the company released a trading update in which it said it is in advanced talks with several strategic investors, including its founder Tom Joule regarding a potential cornerstone investment in an equity raise for the company.
Mr Joule recently returned to the firm in an executive position.
The company also stated that it is continuing to progress with alternative options, such as company voluntary arrangement (CVA) planning, in conjunction with the equity raise. In addition, Joules said it will commence consultation with key stakeholders on the turnaround plan, including potential alternative options.
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However, in its press release, the company told investors that trading for the 11 weeks to October 30 has been behind expectations.
While it explained that active customers are growing, and brand health and awareness KPIs have remained strong, trading performance has underperformed due to the challenging UK economic environment, which has negatively impacted consumer confidence and disposable income.
Ecommerce sales have also been behind expectations for the period due to softer web traffic.
In addition, Joules noted that dresses, menswear, and more formal categories have performed well, but larger core categories, including outerwear, wellies, and knitwear, have been impacted, in part, by the milder-than-expected weather.
Meanwhile, wholesale for the Joules brand has performed well, in line with expectations; however, wholesale performance overall has been affected by underperformance across Garden Trading and US wholesale.
At the time of writing, Joules shares are down over 22%, trading around the 10.6p mark.
