Home shopping group Findel has unveiled an £80.5m fundraising as it restructures its balance sheet and bids to improve performance.

Findel, which owns businesses such as Kitbag and Express Gifts, will raise the cash via a rights issue and share placing.

Conditional upon the success of the fundraising, Findel has organised new lending facilities which will enable better operational flexibility.

The changes will allow Findel to cut net debt by about £110.5m.

Findel said it had faced “considerable challenges” in recent years, when profitability fell.

The retailer said: “This has stemmed from a combination of the effects of the group’s previous acquisition-led strategy, difficult trading conditions, the effect of introducing more prudent accounting policies and accounting irregularities in the education supplies division.”

Findel has however “identified several areas of opportunity to improve performance” and its board believes “each of the group’s businesses is capable of contributing to significantly improved performance”. Making the improvements will need £35m of new money.

The retailer reported that group sales on a continuing basis have been “slightly behind” the previous year.

In the 17 weeks to January 28, aggregate home shopping sales fell 1.7%. Sales at Express Gifts fell 4.3% but Kitbag was up 18%.