Joules collapse: Clothing brand still owes £100m to suppliers and £1.3m to gift card holders
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Joules, a popular clothing brand that fell into administration last year, still owes its suppliers, landlords and the holders of gift cards more than £100 million, it has been reported.
According to The Times, Joules, a favourite of the Prince and Princess of Wales and of TV presenter Holly Willoughby, collapsed as it was unable to repay a bank loan after having faced huge increases in shipping and other costs.
The retailer, which sells clothing and homewares inspired by British coastal and countryside living, was bought out of administration by Next, saving 1,450 jobs and 100 stores. Next teamed up with Tom Joule, the retailer’s founder and they respectively own 74% and 26% of the business.
According to the most recent progress report from the administrators, unsecured creditors - companies without collateral against the debt owed to them, are owed a substantial amount of £112 million due to the fallout.
Additionally, clothing and fabric suppliers are owed £38.6 million, associated property companies are owed £3.8 million, and gift card holders are owed £1.3 million. The remaining debt is owed to other connected companies and creditors. Unfortunately, the statement of affairs suggests that these parties will only receive a fraction of what they are owed.
Tom Joule established Joules in 1989 at a country show stall, gradually building it into a nationwide brand with 130 stores. Recently, he acknowledged that the business had become overly complicated and struggled to cope with increasing costs.
In an effort to save the company, Tom Joule attempted to secure equity investment and explored options to reduce rental expenses through a company voluntary arrangement. However, the company ultimately collapsed as it couldn’t secure the necessary bridging finance to repay a £5 million loan from Barclays at the end of November.
The business rescue deal occurred shortly after Next acquired the brand and website of Made.com for £3.4 million following their own administration process.