The South African owner of women’s fashion brands Phase Eight and Hobbs has ignited a furious row with one of the City’s leading insolvency practitioners after its effort to buy Joules was thwarted by a last-ditch rival bid.
Sky News has learnt that The Foschini Group (TFG) has written to Interpath Advisory, which was appointed administrator to Joules last month, to protest at its decision to sell the business to Next.
City sources said on Wednesday that TFG, which also owns Whistles, could lodge a formal complaint with the Institute of Chartered Accountants in England and Wales (ICAEW) about Interpath’s conduct.
The South African group had been on the brink of a deal to buy Joules out of administration late last month and was said to have been confident of clinching a deal.
Less than 24 hours later, however, Joules was sold to Next and Tom Joule, the chain’s founder, in a transaction worth up to £34m.
The deal preserved 100 of Joules’ 124 stores in the UK and Ireland.
One insider said TFG was also understood to have written to lawyers working on the sale to suggest that they may have acted in breach of rules overseen by the Solicitors Regulation Authority.
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TFG is said to be seeking to recover the costs it incurred on its ultimately failed bid to buy Joules.
A spokesperson for the joint administrators said on Wednesday: “We stand by the process which was run and reject any notion of unfairness.
“TFG were granted a period of exclusivity in which they had the opportunity to conclude a transaction. Despite our best efforts, they were unable to do so within this timeframe.
“Thereafter, a materially better offer for the business was received, which the joint administrators concluded represented the best outcome for the Company’s creditors.
“In line with their statutory duties, they accepted this offer and went on to conclude the transaction in short order, improving the outcome for creditors and preserving circa 1,400 jobs and over 100 stores.”
It was unclear whether any formal proceedings would ensue.
Joules had been in talks with Next about a strategic investment earlier in the autumn but the two sides were unable to agree the terms of a deal as the smaller company’s share price continued to sink.
It then hired Interpath to consider an insolvency procedure – known as a company voluntary arrangement – that would have allowed it to slash its overheads through store closures, rent reductions and job cuts.
Joules said in August that it was aiming to secure an equity investment of about £15m, after warning that it would deliver a loss bigger than previous market expectations.
Joules has been listed on the London stock market since 2016, having been founded in 1989 when Mr Joule began selling clothes from a country show stall in Leicestershire.
TFG could not be reached for comment.
