The company, which has dozens of stores in the North East and employs about 16,000 people nationwide, saw its share price plunge after bosses confirmed it would miss earnings targets for the year.
And the race to save the firm was dealt a further blow after an approach by an anonymous suitor to buy it out was withdrawn.
But managers have remained bullish, insisting they still “believe that a financing solution will be found that involves its existing partners and stakeholders”.
A share placing in September, intended to secure enough cash to secure stores’ short-term future, raised about £30 million.
It is believed up to two thirds of this was used to speed up a planned expansion of its Morrisons Daily partnership scheme with the retail giant, which last year was the subject of its own major takeover deal.
The leftover funds were to be used to boost its “working capital headroom”, but a downturn in customer spending has eaten away at this.
The latest update on the firm’s fortunes came in the same week supermarket chain Sainsbury’s confirmed up to 2,000 jobs could be at risk across the UK from plans to shut cafes at hundreds of stores, including two in Sunderland.
The retailer has insisted it has seen a “tangible improvement” in product availability in recent months, which it hopes will improve profitability and ensure its survival.
Fortunes have been affected by the coronavirus pandemic, with the shopper footfall during the usually busy Christmas and New Year period hit by the spread of the Omicron variant of Covid-19.
While revenues have picked up since then and following the end of many restrictions in England, business remains below expectations for the quarter to the end of February.
The company’s board said it therefore expects adjusted earnings for the current financial year to be “slightly behind current market expectations”, with a net debt of around £100 million.