Sharp Margin DeteriorationNegative gross, operating and net margins in 2025 point to structural pricing pressure or elevated costs that undermine the core retail economics. If negative gross margins persist, the business cannot sustainably cover fixed costs or invest in growth, making recovery much harder over months ahead.
Rising Leverage And Eroded EquityMaterial increase in leverage and falling equity reduce financial flexibility. With higher debt relative to equity and ongoing losses, interest and refinancing risk rise and capacity to fund inventory, store upkeep, or strategic initiatives is constrained unless profitability or cash flow materially improves.
Declining Revenue TrendNegative revenue growth (~-7.9%) signals weakening demand or market share loss in core accessory categories. A shrinking top line reduces operating leverage, makes fixed costs harder to cover, and amplifies the impact of margin pressure, challenging sustainable recovery over the medium term.