Joules’ rescue by Next offers strong opportunity for a successful turnaround, says GlobalData

Following the news that Next has rescued Joules from administration, and intends to continue operating 100 of its 124 stores;

Pippa Stephens, Apparel Analyst at GlobalData, offers her view:

“Next’s acquisition of Joules is a positive outcome for the struggling British fashion brand, as whereas other contenders like Frasers Group would have likely resorted to closing a large proportion of its stores, Next intends to keep 100 of its 124 locations open. This will make it easier for the retailer to maintain awareness and showcase its unique brand identity than if it were to operate predominantly online. Next’s customer base also overlaps significantly with the typical Joules shopper, making it well placed to repair Joules’ brand image, which has gradually deteriorated in recent years. By integrating the brand onto Next’s Total Platform, it will also have greater scope to capitalise on the ongoing outperformance of the online channel.

“While Joules was an outperformer in the UK clothing & footwear market prior to the pandemic due to its loyal customer base and unique product handwriting, frequent discounting has damaged its brand equity, so Next must primarily focus on driving full price sales to help it regain appeal. However, to cement its place in the market, it also needs to ensure it can justify these prices, especially in the context of the cost-of-living crisis. It must refresh its product ranges to be more modern and inspiring, while maintaining its distinct handwriting, which it will find it much easier to do now that founder Tom Joule is back in a creative role.”

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