Joules set to enter administration after failing to

secure fresh funding

Pearson asset library: AL1513685

Joules is to appoint administrators after the UK clothing brand failed to find an investor to
save the business, in a move that could put 1,600 jobs at risk.

The retailer, whose customers include the Princess of Wales and singer Taylor Swift, had
been in talks with investors, including its founder Tom Joule, to raise emergency funds after
a turbulent period for the chain. “Discussions with various parties have not been successful
and have now terminated,” Joules said on Monday.

It will now file a notice of intention to appoint administrators “as soon as reasonably
practicable”, the group said in a statement, with insolvency specialists at Interpath Advisory
waiting in the wings. The move gives the company 10 days of breathing space to find a
buyer as the retail sector comes under increasing pressure.

The retailer, which sells colourful clothing and homeware inspired by British country
lifestyles, had said earlier this month it was in “advanced discussions” with a number of
investors to secure funding. However, the board said these discussions had ultimately been
unsuccessful.

The group has struggled to stay profitable, having previously warned of higher freight rates,
wage costs and a slump in consumer spending amid the soaring cost of living. “It’s a
combination of things . . . it’s not just trading over the last 2-3 months, it’s not just the
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pressure on freight costs, it’s not just the fact they had supply chain issues last year, but the
cumulative impact in terms of what that’s done to the balance sheet has taken its toll,” said
John Stevenson, a retail analyst at Peel Hunt.

(Adapted from the article in the Financial Times by Abby Wallace and Sarah Provan on 14th
November 2022 https://www.ft.com/content/a8dc1f09-6318-4b3b-940e-51324c37f38b )

Pearson Edexcel GCSE (9-1) Business

This case study relates to the following topic areas of the course specification:
1.1.2 Risk and reward
1.2.4 The competitive environment
1.5.4 The economy and business
1.5.5 External influences

Recommended research activities:

1. Research made.com, what led to their near closure just a week before? Who
saved them?
2. What does ‘administration’ mean?
3. Research the article “tags” linked to the article on the FT site.

Exam style questions:

1. Outline one other financial risk of business activity (2 marks)
2. Outline one non-financial risk of business activity (2 marks)
3. Analyse the impact the cost of living crisis will have on high street shops (6
marks)

Students aged 16-19, their teachers and schools around the world can read FT.com
for free. Sign up or check if you are registered at www.ft.com/schoolsarefree