Declining RevenueSustained revenue decline erodes scale economics and reduces gross profit leverage, making it harder to cover fixed costs. Over several months this weakens competitive position, constrains reinvestment in merchandising or store operations, and prolongs recovery.
Negative MarginsPersistent negative EBIT and net margins show the core retail operations are loss-making, consuming capital rather than generating it. This structural profitability gap limits reinvestment, undermines ability to shore up inventory/marketing, and stresses lender confidence.
High LeverageA debt-to-equity ratio of 1.63 combined with negative ROE signals elevated solvency and interest-service risk. Over a medium-term horizon this restricts strategic options, increases refinancing risk, and can force asset sales or cost cuts that impair long-term competitiveness.