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Digital retailer Studio Retail said it was considering raising capital because a supply squeezes had disrupted its operations.
Studio Retail said supply-chain challenges in calendar 2021 have not only caused higher shipping costs, but also led to late-arriving unsold stock.
'This has led to a higher level of inventory than normal at this time of the year,' it said.
'This is further compounded by commitments to current and future season stock needing to be made earlier than normal due to ongoing nervousness in supply chains.'
'We are exploring a range of options to meet the resultant working capital funding requirement, including discussing the current level of our working capital facilities with our long-standing UK lenders.'
'In addition, we are considering other controllable actions to increase short-term liquidity, alongside steps already taken to manage the pace of some of our medium-term capital investments.'
In a trading update, the company said third-quarter trading had improved as the quarter progressed, helped by greater availability of stock in November and December.
'Product sales in the eight weeks prior to the interim results announcement on 25 November were down 21% against the prior year,' it said.
'However, in the remaining five weeks of the quarter, which included Black Friday, product sales were 9% ahead of the prior year.'
'This brings the performance for Q3 as a whole to 10% below the exceptionally strong performance seen during the second national lockdown period last year and, cumulatively for the first 39 weeks, down by 5%.'
'The comparatives with last year are distorted due high street lockdowns consequent to Covid-19.'
'A more appropriate comparison is against the performance two years ago.'
'On this basis, Q3 product sales were up 18%, bringing the total growth against FY20 for the first 39 weeks of the year to +28%.'