Joules, the Harborough-based designer fashion group, has seen performance fall below expectations due, it says, to “a challenging UK economic environment which has negatively impacted consumer confidence and disposable income”
Their trading underperformance has resulted in the Company’s working capital position falling below expectations, which has led the company to discussing bridge financing options as well as considering a Company Voluntary Arrangement (CVA), enabling it to pay creditors over a fixed period.
Net debt at the end of October was £25.7m with headroom of £11.4m, according to a statement to the London Stock Exchange today [Monday 7th Nov 2022 ]. However, the statement goes on to explain that this headroom is reduced by £5.6m of ‘trapped cash’ (i.e. cash held in transit by payment providers etc) and would also be reduced by repayment of the £5m short-term RCF (“STRCF”), due for repayment on 30th November 2022.
The Company is therefore in discussions with Tom Joule and its lender in regard to a bridge financing proposal in order to enable continued progress to be made with its re-financing plans. Should that bridge financing proposal, or its terms, not be agreed, the Company states that it expects it would be unable to repay the STRCF on its due date for repayment.
The Company had previously announced that it is assessing its ongoing financing requirements, including a possible equity raise, to allow the Company to strengthen its balance sheet and provide a strong platform to support its turnaround plan.
Since that announcement, the Company has had advanced discussions with a number of strategic investors, including Tom Joule, to provide a cornerstone investment in an equity raise.
It is the Group’s intention to commence consultation with key stakeholders, including suppliers, on the turnaround plan including potential alternative options, should they be required.
