Hot Tuna, the surfwear business best known for its piranha logo, suffered further heavy losses as it admitted it needs a buyer to rescue the brand.
The company, which sells “edgy surf/streetwear” in the UK, United States and Australia, said underlying losses were £862,000 in the year to June 30 after sales more than halved to just £207,000.
Hot Tuna originated in Australia in 1969 “to serve the demands of sojourning surfers” and was bought from a consortium of investors in 2005 before listing on the London market where it appointed supermodel Elle Macpherson to its board.
But the group put itself up for sale in November after it admitted that sales had not met targets and the business was unlikely to be able to stay afloat throughout 2012. It said the brand had received strong interest and it expects to put a firm purchase offer to shareholders in January.
But it warned that further “aggressive” cost cutting could be on the cards if a sale was unsuccessful and “in the event of the business continuing”.
Should it sell the brand and stock, the London-based company will remain a listed shell with all but one of its directors set to step down.
Its shares slumped by more than 40%, leaving the company with a market value of just over £1.5 million. They are now trading at less than 1% of their price after the company’s flotation.
The group described its overall sales performance during the year as disappointing.
Its European operations showed signs of “mild recovery” with encouraging sales in Italy. In the UK some of its online customers showed slight increases in their “modestly sized orders”, while further sales were generated by selling old stock at a discount. Revenues in Australia were also disappointing after it lost two major retailers in 2010.
But it said its US market bore the brunt of the pain, with only minimal orders as the retail market shrank. It has now started to wind up its US operations and expects all trading to have ceased by February. Hot Tuna said the US still has the potential to be its biggest market but it would need to find a distribution partner.
Copyright © 2011 The Press Association. All rights reserved.