We model the joint clustering and outlier detection problem using an extension of the facility location formulation. The advantages of combining clustering and outlier selection include: (i) the resulting clusters tend to be compact and semantically coherent (ii) the clusters are more robust against data perturbations and (iii) the outliers are contextualised by the clusters and more interpretable. We provide a practical subgradient-based algorithm for the problem and also study the theoretical properties of algorithm in terms of approximation and convergence. Extensive evaluation on synthetic and real data sets attest to both the quality and scalability of our proposed method.