Next will not take a stake in troubled clothing retailer Joules after talks between the two ended, the companies have announced.
Shares in Joules plummeted by over a third on Tuesday afternoon after confirmation that the potential deal had collapsed.
Fashion and homeware brand Joules confirmed investment talks last month after reports that it could sell a 25% stake to its larger rival.
However, it told shareholders on Tuesday that discussions over the move, which reports claimed could have raised around £15 million, have ended.
Joules added it was still in discussions about using Next’s online platform to sell its clothes.
“Discussions about Next plc acquiring an equity stake in the group have ceased, however discussions regarding Joules potentially adopting the Next Total Platform in the future will remain ongoing,” it said.
Joules, which has seen its shares drop more than 90% over the past 12 months, said it will continue work on its turnaround plan to rapidly improve profitability.
It said it is seeking to improve its pricing and promotional strategy, focus on more profitable products, and improve cost control.
Nevertheless, the retail group said its outlook for the current financial year has not changed.
Joules said it is continuing to “assess its ongoing financing requirements and is considering alternative options”, such as an equity raise, as it seeks to strengthen its balance sheet.