Fri, 23 Jun 2023 | ADMINISTRATION
Clothing brand Joules which fell into administration last year, reportedly still owes over £100 million.
According to reports, the retailer is yet to pay back its suppliers, landlords and the holders of gift cards after its collapsed which was due to being unable to repay a bank loan and faced huge increases in shipping and other costs.
Joules was bought out of administration by Next, saving 100 of its stores and Next then teamed up with Joules’ founder, Tom Joule, they respectively own 74 per cent and 26 per cent of the business. The takeover saw Next and Joule acquire the “majority of assets of Joules” through a newly formed company for £34 million at the start of December last year.
According to a progress report from the administrators, unsecured creditors - companies without collateral against the debt owed to them, are still owed a £112 million. Clothing and fabric suppliers are also owed another £38.6 million, associated property companies are owed £3.8 million, and gift card holders are owed £1.3 million.
Before the administration, founder Tom Joule acknowledged that the business had become overly complicated and struggled to cope with increasing costs. He attempted to secure equity investment however, the necessary bridging finance to repay a £5 million loan from Barclays at the end of November couldn’t be secured and the retailer was nearly £114 million in debt.
According to Joules’ ‘statement of affairs’, during its administration, the company owed a software company £345,000, £300,000 to a Deloitte branch in Hong Kong, a number of property companies and landlords were owed hundreds of thousands of pounds and £3.86 million to HMRC.
Joules had assets of approximately £22 million available to pay preferential creditors when administrators were drafted in.
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