The high street giant Next is in talks to acquire a large stake in Joules, the struggling fashion and lifestyle goods chain. It has learned that Next has been in talks for several weeks to acquire up to 25% of the smaller London lifestyle listed retailer joules.

City sources said this weekend that discussions were not certain to result in a deal, and that any announcement could take some time.

If completed successfully, the transaction would make Troubled Joules the latest in a string of big names to join Next’s online platform as it continues to expand beyond the core brand that has made it a gaming giant. the industry.

Joules, which operates about 130 stores and employs more than 1,000 people, has had an increasingly difficult time as inflationary pressures flood the retail sector.

Last month, it hired KPMG to help with efforts to improve “profitability, cash generation and liquidity margin.”

It later said it had agreed an extension of banking facilities with its main lender, Barclays, which would place restrictions on its ability to pay dividends.

Joules’ valuation has plunged nearly 90% over the past year, even as top-line sales growth has held up reasonably well.

At Friday’s closing share price of 33 pence, it had a market valuation of just £37m.

For Next, acquiring 25% of Joules would cost a small sum of around £10m based on the current valuation of the smaller company.

It was unclear this weekend how the stake purchase would be structured and whether it would include governance rights.

Next has done joint ventures with brands like Reiss and Victoria’s Secret lifestyle retailer Joules in recent years, while it also recently agreed a deal to take full ownership of baby products retailer JoJo Maman Bebe along with hedge fund Davidson Kempner.