High LeverageSignificant leverage limits financial flexibility and raises refinancing and interest-service risk. In a capital-intensive or seasonal apparel cycle, high debt constrains the ability to invest in product, absorb shocks, or pursue growth initiatives without increasing financing strain.
Negative ProfitabilityPersistent negative net margins indicate the company has not yet translated revenue into sustainable profits. Ongoing losses erode equity, hinder reinvestment, and make reliance on improving cash flow and margin recovery essential to avoid further balance-sheet deterioration.
Revenue VolatilityVolatile historical revenues reduce predictability for inventory, sourcing and capex planning in apparel. Revenue instability undermines the durability of margin improvements and complicates debt servicing plans, especially given the company's elevated leverage and limited equity buffer.