Planet Organic suppliers have reported a temporary suspension of orders by the troubled supermarket chain as it works on a deal to secure its future.
It follows news emerging this week that Waitrose had pulled out of a potential deal to invest millions of pounds in its smaller rival in return for a sizeable stake.
Some suppliers of Planet have received messages from the business stating it had halted taking any new orders for the next 10 days.
The Grocer understands the business is overstocked across its store base and is closely managing its cash while advisers at Interpath work on a deal.
The decision by Waitrose to abandon a potential deal with Planet Organic – first reported by Sky News – has left the grocery chain continuing to seek alternative funding avenues.
CEO George Dymond said the business was in advanced talks with “several interested parties”.
“Planet Organic is continuing to perform well, with a strong sales performance across the business,” he added. “However, it has been a challenging environment in which to raise additional funds to support our growth plans.
“Advanced stage talks aimed at securing further investment are continuing with several interested parties. We are hopeful that we will find a way forward to assure the future of this much-loved brand.”
Planet engaged advisors at Interpath Advisory earlier this year to explore options for fresh financing and potential buyers.
Dymond, who joined the business at the end of 2021, told The Grocer at the time that the supermarket needed £7m to help it open new stores and return to profitability.
Majority-owned by private equity house Inverleith since 2018, the business struggled during the pandemic as a lack of footfall in London, where most of its stores are located, hit sales and led to five permanent closures.
It has now booked losses in each of the past four financial years from 2018/19 to 2021/22, with more expected in the current fiscal period to the end of August.
Planet carried out a successful crowdfunding round on Seedrs at the end of last year, securing £7m in a campaign that valued the company at about £30m.
However, a change to the growth plan as Dymond scaled back ambitions to boost the estate to 50 stores meant the company had to pull the round before taking any money – a situation similar to Inverleith-backed Farmison.
Planet is focusing on expanding its portfolio to 18 stores – from the current 14 – rather than the 50 previously targeted.
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