Joules Group PLC (AIM:JOUL) said it is in talks with its founder over bridge financing as poor trading means its working capital position is below expectations.
According to a statement, the struggling high-end retailer is in discussions with founder and product director Tom Joule and its lender over a bridge financing prosposal to "enable continued progress" with ongoing re-financing plans.
If it is unable to attain this bridge financing, it will not be able to pay its short-term revolving debt facility of £5mln due on 30 November, it said.
As a result of below-expectations trading in the 11 weeks to October 30, the group's working capital position is lower than expected, with net debt standing at £25.7mln with headroom of £11.4mln.
Mild weather and a challenging economic environment affected sales, with ecommerce trading behind expectations, although store sales were slightly ahead of forecasts, it said.
Margins benefitted from its improved pricing and delivery proposition, Joules said, although this was offset by high levels of promotional activity, meaning it was slightly behind expectations.
The company said it made “good progress” in defining and delivering its turnaround plan.
It said it has advanced discussions with several strategic advisors to provide cornerstone investment in an equity raise, and also reported continuing progress on alternative options, including company voluntary arrangement (CVA) planning.
Key initiatives include wholesale simplification, an exit from EU and US markets and simpler organisational and leadership structure amongst other things.
Previously, Joules announced it was assessing financial options to strengthen its balance sheet, including an equity raise and a restructuring of its creditors.