British retailer Next in $42 million rescue deal for Joules
LONDON (Reuters) -British retailer Next has bought wellingtons to jumpers store chain Joules in a rescue deal with founder Tom Joule, paying 34 million pounds ($42 million) in cash to buy the majority of its assets out of administration.
The deal will keep about 100 Joules shops open while about 24 will be closed, of which 19 will close immediately, Next said in a statement on Thursday, with the loss of 133 jobs from amongst the 1,600 Joules staff.
Last month, Next, one of Britain’s biggest clothing retailers, stepped in to buy another high profile casualty of Britain’s consumer downturn, acquiring Made.com, but it bought only the brand, resulting in about 400 redundancies.
Some retailers in Britain are struggling as shoppers rein in spending due to soaring household bills, with Joules and Made.com the biggest names to enter administration.
Next, often considered a gauge of how British consumers are faring, has managed to weather the consumer storm so far, sticking to full-year guidance in November after cutting it in September.
Under the arrangement agreed between Next and Joule, who launched the country-inspired brand famous for its stripes and floral prints in 1989, Next will own 74% of the new company with Joule holding the balance.
Joules will use Next’s technology, namely its Total Platform, for its online sales, website, warehousing and distribution needs.
“We are excited to see what can be achieved through the combination of Joules’ exceptional product, marketing and brand building skills with NEXT’s Total Platform infrastructure,” said Next chief executive Simon Wolfson in the statement.
Before Joules’s collapse, it had held talks with Next about a possible investment, but the discussions broke down in September.
Next said its plan to keep 100 shops open was subject to agreeing terms with landlords. The company also said that it had paid 7 million pounds for the Joules head office and that the chain would retain “management autonomy and creative independence”.
($1 = 0.8189 pounds)
(Reporting by Pushkala Aripaka and Yadarisa Shabong in Bengaluru and Sarah Young in London; Editing by Shinjini Ganguli, James Davey and Jane Merriman)