An investment vehicle set up by one of the founders of Lovefilm is plotting a rescue bid for Planet Organic, the struggling grocer.
Sky News has learnt that Redbus Ventures, which has assembled a large portfolio of stakes in early-stage consumer-facing businesses, is among a small number of parties exploring offers for the organic supermarket chain.
City sources said Redbus Ventures – founded by Simon Franks, a prominent entrepreneur – was expected to table a proposal to inject several million pounds into Planet Organic imminently.
Redbus Ventures describes itself as one of the most active funders of early-stage businesses in the UK, and counts online florist Flowerbx, Cleo, a fintech, and Perlego, a digital education platform, among the companies it has backed.
Mr Franks built Lovefilm into a £200m business before selling it to Amazon in 2011, having previously sold Redbus Film Distribution to Lionsgate, the US media group.
On Thursday, Sky News revealed that the chain had put insolvency practitioners on standby as it races to find new backers.
It has filed a notice of intention to appoint administrators – a move which provides it with breathing space from creditors as it continues rescue talks.
Discussions with a number of interested parties are ongoing after Waitrose pulled out of talks about a deal late last week.
Insiders said that a sale of the business was increasingly likely to take place through a pre-pack administration process, which would be likely to put a chunk of the chain’s 360-strong workforce at risk.
‘Current uncertainty in the retail sector’
Planet Organic chief executive George Dymond told staff this week that it had “not got back to the levels of sales that we were seeing before the pandemic”.
“So, while we have taken every possible action to improve our position, including additional investment from our existing shareholders, we have so far been unsuccessful in raising sufficient funds needed to support the business and the growth plan.
“Since the beginning of the year, we have been in advanced discussions with a potential investor with a view to them supporting the business, putting a platform in place to enable us to achieve this growth.
“Regrettably and unexpectedly these discussions ended last Friday without an investment being agreed. This is largely because of the current uncertainty in the retail sector, as well as market caution more broadly.”
‘Business as usual for now’
He added that the company was “still working hard alongside our advisors to explore alternative options to secure investment”, but said it had had to take steps to commence preparations for insolvency.
“We know that this will create more media attention and a lot of questions from our customers – the key message is that it is business as usual for now,” he said.
“I want you all to know how very sorry I am that we are in this position – I am conscious that this will be a very uncertain time for you all.”
Planet Organic, which was founded in 1995 by Renee Elliot, has been working with Interpath Advisory on a review of its strategic options since early this year.
The chain, which trades from 13 stores, sells organic food and drink, as well as healthcare and bodycare products.
Like many retailers, its recent performance has been hampered by the pandemic and reduced city centre footfall.
It is understood to have been loss-making in each of its last two financial years.