Struggling fashion retailer Jack Wills is heading towards a cash crunch after burning through cash injections from its private equity owner BlueGem.

The fashion chain is said to be burning through £28m worth of investments arranged by its equity owner led by Marco Capello, a source told The Sunday Times.

BlueGem took control of the fashion retailer in 2016 and has already injected £16m into the struggling business, along with a further £10m from Italian businessman Giorgio Girondi.

A source said: “Trading fell off a cliff two months ago.”

”There will be crunch time soon when it comes to buying stock for Christmas and it will all depend on what Marco decides to do,” the source said.

Another source said the business would need more cash injected or a restructuring before the end of the summer, although its parent company BlueGem is reportedly reluctant to pursue a possible CVA.

Chief executive Suzanne Harlow’s efforts to increase margins by changing suppliers since she took the helm in September have reportedly been scuppered by tough trading conditions.

Jack Wills posted pre-tax losses of £29.3m on sales of £139.5m in the year to January 2018.

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