Deloitte faces probe over Joules audit

The UK's accounting regulator has started a probe into Deloitte's audit of clothing retailer Joules Group.

The Financial Reporting Council said its investigation relates to Deloitte's audit for the year to May 30, 2021. Joules went into administration last year and was later acquired by retailer Next and founder Tom Joule in a deal that saw the retailer buy around 100 Joules shops for £34n and take a 74% stake.

Joule, who set the firm up in 1989 on a country show stall selling brightly-coloured clothing and wellington boots, owns the remaining 26%.

He said the business became “too complex” to survive as costs started rising and tried to secure an equity investment to shore up the firm’s balance sheet amid soaring inflation.

The company ultimately collapsed as it was unable to secure the bridging finance required to repay a £5m Barclays bank loan that fell due at the end of November.

Reporting by Frank Prenesti for Sharecast.com