Shares in Joules Group PLC dropped by a quarter early Monday, after the British lifestyles retailer warned that trading underperformance has left its finances in a precarious state.

The stock was down 24% at 10.40 pence early Monday in London. It is down 95% over the past 12 months after a series of profit warnings and failed talks for an investment by larger peer Next PLC.

The Leicestershire, England-based country lifestyle retailer said it is in talks with founder Tom Joule and its lender about obtaining a bridge loan, as recent weak trading has left its working capital position below expectations.

Net debt stood at £25.7 million at the end of October, leaving headroom of £11.4 million.

However, Joules said this headroom is reduced by £5.6 million, representing ’trapped cash’, which is cash held in transit by payment providers and others. Headroom also will be reduced by a £5 million repayment of the company’s short-term revolving credit facility, due on November 30. That leaves just £800,000 in headroom.

Joules said it also is in discussions with its lender about waiving some financial covenants and is talking to Joule and other strategic investors about providing a cornerstone investment for an equity raise.

The retailer said overall trading for the 11 weeks that ended October 30 has been below company expectations. It said this is partly due to economic uncertainty in the UK and partly due to mild weather, which reduced demand for outerwear, boots and knitwear.

Retail e-commerce sales have been below expectations but in-store sales have been slightly ahead, Joules said. Overall retail margins were slightly below expectations, it said, due to high levels of promotional activity.

UK wholesale of the Joules brand has been in line with expectations, the company said, but Garden Trading and US wholesale has underperformed.

Joules said it is making progress on its turnaround plan, which includes exits from the EU and US. Tom Joule, who had stepped back to non-executive director, is acting as product director as part of a new product design and development drive.

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