High Leverage And Negative EquityNegative equity and high leverage create structural solvency and refinancing risks. This weak capital base limits financial flexibility for investment or turnaround actions, increases borrowing costs, and raises the probability of forced restructuring if operating losses persist, undermining long-term viability absent recapitalization.
Persistent Negative Free Cash FlowSustained negative free cash flow erodes liquidity and forces reliance on external financing to fund operations. Over the medium term this constrains store investment, inventory replenishment and supply negotiations, and increases default or covenant risks, making operational turnarounds harder to execute without fresh capital.
Declining Revenues And Continued LossesOngoing revenue decline and negative margins indicate loss of market traction or structural cost mismatches. Persistent losses consume equity and limit reinvestment, reducing competitive position versus peers and making it difficult to finance marketing, price competitiveness, or format upgrades needed to regain customers over the coming months.