Next in talks to buy £15m stake in yummy mummy favourite Joules

JOULES is set to be given a much needed cash injection by Next.

The ‘yummy mummy’ High Street favourite, whose share price has slumped by almost 90pc over the last year, confirmed it is in talks with the fashion retailer about a £15m investment. If a deal is struck, Next could take a stake of about 25pc in the company.

The Leicestershire-based clothing and accessories business hopes the deal will see it join Next’s powerful online platform, which would help it boost sales.

Next has a winning formula of bringing hundreds of rival brands onto its ecommerce platform. It has struck similar online joint-ventures with companies including Reiss and lingerie firm Victoria’s Secret. In April, Next and a group of investment firms took control of maternity and baby clothing retailer JoJo Maman Bebe.

The deal is not finalised but an initial investment in Joules is unlikely to lead to a full takeover, as Next does not typically buy companies outright. Joules’ share price rose 33.3pc, or 11p, to 44p in reaction to the news, a welcome reprieve for the under-fire retailer.

Joules, which has about 130 stores and employs more than 1,000 people, has been struggling this year with disappointing sales, supply-chain problems and rising costs. Danni Hewson, analyst at AJ Bell, said, ‘Once a shining star in the retail sector, Joules saw its share price collapse after a string of profit warnings.’

The retailer warned in May that inflation and falling consumer confidence are hurting sales, especially for full-priced clothes, home and garden products.

Chief executive Nick Jones is stepping down this year after three years in charge and last month advisers at KPMG were drafted in to shore up the retailer’s finances.

Joules’ lender Barclays has agreed to extend its banking facilities but curbed shareholders’ dividends. In contrast, Next is on a roll. Last week it reported a 5pc uptick in sales during the second quarter of the year.