Fashion chain Joules halves in value after Next talks collapse

STRUGGLING fashion chain Joules has almost halved in value after talks about an emergency cash injection from rival Next collapsed.

Shares in the ailing retailer fell by almost 50pc after Joules confirmed its FTSE 100 rival had ended discussions about an investment.

Next was in talks to put £15m into Joules in return for a minority stake. News that talks have come to nothing cast doubt over Joules’s future as it is forced to seek alternative funding to strengthen its finances.

“The group continues to assess its ongoing financing requirements and is considering alternative options, including a possible equity raise, to strengthen its balance sheet,” the company said.

Shares in the chain plunged by 49pc following the update, valuing Joules at just £15m. It was worth about £140m when it listed in 2016.

Last month, it warned that it will record a loss this year and blamed this summer’s heatwave for depressing sales of raincoats, jumpers and boots.

Joules, which has about 130 stores employing more than 1,000 people, added it was likely to be forced to seek permission from lenders to break rules governing its debt. At the end of July its net debt was £21m.

It told investors yesterday it will press ahead with a turnaround plan despite the funding uncertainty.

Founder Tom Joule, currently a nonexecutive director, will return to the front line and help with the design of the products.