Revolution Beauty sank in value after the beauty business revealed that sales plunged by more than a quarter over the past year.
Bosses at the online retail specialist also said they are reviewing its funding options before its current credit facility expires later this year.
Shares in the troubled firm dropped by as much as 40% on Tuesday morning, to their lowest level on record.
Revolution told investors that revenues dropped by 26% to £141.6 million for the year to February 28, compared with a year earlier.
It said this came after the brand reduced the size of its product portfolio while it was also impacted by weakness in the US and online channels.
Net sales were predicted to continue decline by double digits in the first quarter of the new financial year, driven by the discontinuation of some produce lines.
However, Revolution said sales across March and April were even weaker than expected due to a challenging performance from digital retailers and waning consumer confidence, particularly in the US.
The group is also expecting to face an impact from recent US tariff plans.
In the latest financial year, 23% of the firm’s sales were generated in the US, with approximately 60% of products sold in the country being manufactured in China.
As a result, Revolution hailed the de-escalation in trade tensions between the US and China from earlier this week which led to a pause on plans for sharp increases in tariffs between the nations.
It is currently speaking with retail partners about potential price increases in the US after tariff increases come into force.
Company management said they are also holding talks with its lenders about potentially extending its current £32 million credit facility, which is due to expire in October.
In a statement, the business said: “While the board has confidence in the future medium-term prospects for the company, cash management has been tight and it is clear that the delivery of the strategy will benefit from a more robust capital structure with additional capital to invest into the company.
“As such, the board has been actively reviewing the company’s funding structure.”
