Shares in SurfStitch plunged almost 30 per cent on Monday after the troubled fashion retailer said it would run at least $5 million further into the red than expected this year.
The company said it was battling a subdued trading environment in its key trading markets, especially Britain, where its Surfdome business had been hit with "intense margin and sales pressure".
SurfStitch had previously forecast an earnings before interest, tax, depreciation and amortisation loss of between $5 million and $6.5 million, but on Monday morning said it was on track to lose between $10.5 million and $11.5 million.
The company's shares dived to be down more than 29.5 per cent by 2.30pm, hitting a record intraday low of 6.9??, before closing 23.5 per cent down at at 7.5??. SurfStitch listed at $1 in late 2014 and was trading at an all-time high of $2.09 in November 2015.
"Work to transform our business model ... is going well," chief executive Mike Sonand said.
"However, the retail environment has made it difficult to deliver the planned sales and gross margin improvements as quickly as we would like, resulting in the revised forecast for the group's underlying EBITDA."
SurfStitch said it would close its North American infrastructure by next January and service its SWELL e-commerce platform from Australia.
Mr Sonand said the US would have been unprofitable for the foreseeable future. It would be able to run SWELL from Australia using a technology platform, which also cut operatings costs and delivered a "mobile first" experience.
In a further update to the market, SurfStitch chairman Sam Weiss said the board was committed to making the company cash-flow positive "as soon as possible".
Mr Weiss said the board would consider selling some or all of the business to maximise value for shareholders.
"Notwithstanding the difficult business environment and the operational and external challenges facing SurfStitch, the board, the management and the global SurfStitch team are highly engaged and enthusiastic about the opportunity to deliver on the significant potential of our business," he said.
The business has been in turmoil since co-founder and chief Justin Cameron unexpectedly quit the business in March last year to weigh up a privatisation bid.
It crashed to a $154.7 million full-year loss in August last year after three profit warnings.
Mr Sonand became CEO in June with a promise to restore profitability this year and improve returns for long-suffering shareholders.
