The board of country fashion retailer Joules say they are confident they can turn the business around after reports it was exploring a CVA in a bid to avert its collapse.

And they said a turnaround could include raising equity to pump funds into the business and help get it back on track.

Shares in Joules dropped a third today (Thursday) to 5p – giving it a market value of £5.6 million – as Sky News reported the business was working with Interpath Advisory on voluntary insolvency plans that could trigger store closures or rent reductions, and job cuts. A little over a year ago, in June 2021, shares in Joules had been trading at 300p.

The latest update comes two weeks after it was announced that Next had dropped plans to buy a 25 per cent stake in Joules – an investment that could have been worth £15 million.

It was then announced that founder and chief brand officer Tom Joule was going to take charge of overseeing new product development, working alongside new chief executive Jonathon Brown.

This time last year the business, which has about 135 shops and more than 1,000 employees, was celebrating the opening of its smart new £20 million headquarters – with space for 600-700 people – in its home town of Market Harborough, in south Leicestershire.

But by this summer the business was warning of significant pressure on its gross margins with consumers keen to spend less.

It said trading had softened with sales of outerwear, rainwear, knitwear and wellies all hit by the long hot summer. As a consequence the board was expecting significant losses.

In a fresh “response to media reporting” the business said: “Joules confirms that its new leadership team, led by Jonathon Brown and supported by Tom Joule in an executive capacity as product director, is making good progress in developing its turnaround plan which focuses on driving higher profitability including through: a better pricing and promotional strategy; focusing on more profitable product categories with shorter time to market; and optimising the group's channel mix.

“The company continues to make good progress on its simplification agenda and cost management process.

“Interpath Advisory is assisting the board with an initial assessment of certain elements as part of the development of this turnaround plan.

“As previously announced on 13 September, the group continues to assess its ongoing financing requirements, including a possible equity raise, to allow the company to strengthen its balance sheet. KPMG continues to support the group on its medium-term funding.

"The group's outlook for the full year remains unchanged."