(Bloomberg) -- Next Plc has bought UK retailer Joules Group Plc out of insolvency for £34 million ($41.5 million), winning a bidding war against rival store owners.
The clothing and housewares retailer has teamed up with Joules founder Tom Joule to snap up the chain, which fell into administration on Nov. 16. The maker of colorful coats and Wellington boots had failed to secure bridge financing or raise equity, after warning that it would struggle to repay a £5 million loan due at the end of November.
Next had previously been in talks with Joules to buy a minority stake in the business for £15 million, but those discussions fell through earlier this year and administrators from Interpath Advisory were appointed to find a buyer.
Next said it intended to operate about 100 of the current 124 Joules stores, keeping 1,450 jobs, but some others would be closed immediately by the administrators, with 133 job losses.
Next’s deal to buy Joules was first reported by Bloomberg.
Joules, which started life as a clothing stall at a country show in Leicestershire in the 1980s, posted multiple profit warnings this year amid supply-chain difficulties and waning consumer appetite due to the higher cost of living. Joule returned to the company to try to revive its performance, but was unable to turn it around in time to save Joules from collapse.
Next triumphed over other interested retailers including South Africa’s Foschini Group Ltd., which owns Phase Eight, Hobbs and Whistles. Mike Ashley’s Frasers Group Plc and Marks & Spencer Group Plc also showed interest in the company. Next will own 74% of Joules, while Joule will own 26%.
Along with the £34 million, Next has agreed to buy the current Joules head office in Market Harborough, Leicester, for £7 million.
Next Chief Executive Officer Simon Wolfson said he was “excited to see what can be achieved” through the combination of Joules’ products, marketing and brand building with Next’s cross-platform retail technology.
(Updates with confirmation of deal)
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