Joules shares fell by more than a third after the deal fell through.
Joules confirmed investment talks last month after reports it could sell a 25% stake to a rival.
It told shareholders Tuesday that discussions over the move, which could have raised £15 million, have ended.
Joules is still talking with Next about selling its clothes online.
"Discussions about Next plc acquiring an equity stake in the group have ended," it said. "However, Joules may adopt the Next Total Platform in the future."
Joules, whose shares have dropped 90% in the past year, will continue its turnaround plan to improve profitability.
It wants to improve pricing and promotions, focus on profitable products, and cut costs.
The retail group's financial outlook hasn't changed.
Joules is "assessing its ongoing financing requirements and considering alternative options" like an equity raise to strengthen its balance sheet.
Ekene Mathias 28 w