KPMG brought in to fix finances of ‘yummy mummy’ favourite

EMBATTLED Joules suffered another blow as it confirmed it has hired advisers from KPMG to shore up its finances as the cost of living crisis hits sales.

The ‘yummy mummy’ fashion brand said consultants from the accounting giant’s debt advisory arm will help it navigate the market turmoil. Shares crashed 24.6pc, or 8.15p, to 25p, as the prospect of an emergency fundraising loomed. It wiped another £8.6m from Joules’s market cap, leaving it worth just £28.6m – down from £140m when it floated in 2016.

The retailer has lost 90pc of its market value in the past year amid a series of profit warnings over supply chain chaos and the mounting cost of living crisis. Shore Capital retail analyst Clive Black said the latest update could suggest it needs a cash injection, similar to electrical retailer AO World last week.

The retailer, whose customers include the Duchess of Cambridge and Taylor Swift, was set up in 1989. It has 132 stores and is sold online, as well as by Marks & Spencer under its Brands at M&S strategy.

Joules’s announcement confirmed a story in The Sunday Times which said KPMG’s advisers are exploring options, including raising fresh capital. The company said yesterday the advisers will help it improve ‘profitability, cash generation and liquidity headroom’. It has net debt of £21.4m and said there is headroom for an additional £11.3m of borrowing.

Joules expects to have ‘sufficient liquidity’ to see itself through the summer, when its borrowing usually peaks. It is understood the firm has been working with KPMG since its May profit warning, and its debt levels are unchanged since then.

Joules said it is making ‘good progress’ on plans to simplify its business and boost profits.

The share-price crash comes amid a torrid year for Joules shareholders in the retailer. It is expected to announce its results for the year to May next month, with profits forecast to be at least £5m – lower than an earlier forecast of up to £12m.