Footwear supplier Lambert Howarth is crying out for additional funding to save it from breaking banking covenants after a tough year of trading.
The supply business has fallen into the red after losing a crucial deal with Marks & Spencer and French Connection last year. Its homewares arm has also struggled and, despite a £13 million cash injection from backer Landsbanki in January, the company is calling for an additional financial rescue package.
Pre-tax profits for the year to December 31 fell from £2.4m to a loss of £16.8m, and sales plummeted by 29% to £62.7m.
Lambert Howarth chief executive Pamela Harper said in a frank stock exchange statement that parts of the group needed restructuring, which required funding. "We are in talks with shareholders and potential new investors regarding this fundraising. But in the absence of such fundraising, the group may not be able to operate within its existing banking facilities."
Despite the results, Lambert Howarth has landed licensing deals with handbag brand Radley and knitwear label Pringle, to launch footwear and leather goods for autumn 07 and spring 08 respectively.
The company also secured the contract to supply footwear to Tesco's eastern European business, in line with a strategy to shift its dependence from the UK into international markets. The group said footwear sales in March and April had met expectations.
Harper has also bolstered Lambert Howarth's senior management team, hiring John Suirdale from Burberry and Alfred Dunhill as group supply chain director.
Harper was unavailable for comment.