Investor pulls out of doughnut brand – but firm is hungry for growth

Derbyshire doughnut producer and retailer Project D says it is back on the road to recovery after experiencing a downturn in revenue, delayed store openings and several ‘unforeseen challenges’.

The firm told investors that it was ready to “turn the corner” after a host of problems, including three loss-making months in Decemver, January and February.

Project D, which raised £475,000 through Crowdcube last summer, also said that it had failed to hire a chief executive who had promised to invest £250,000 into the company.

According to hospitality trade title Propel, Project D posted a profit in March.

Managing director Max Poynton said: “Since successfully raising funds through our crowdfunding campaign, we’ve encountered a series of unforeseen challenges that have tested our resilience and adaptability as a company.

“One significant challenge has been the downturn in customer spending, resulting in a 20% decrease across our other business lines. Additionally, the rise in the cost of cocoa, one of our main commodities, has put additional strain on our resources.

“Moreover, our retail shop-fits exceeded our budgeted allowances, further impacting our bottom line.

Project D has closed its Nottingham shop but has other outlets in York, Meadowhall and Terminal 2 at Heathrow. It has various pop-up outlets throughout at targeted events around the country, but staffing had been problem, said Poynton.

He added: “Recruitment has also proven to be a considerable hurdle, particularly in finding skilled team members for both our bakery and retail stores.

“Furthermore, our efforts to secure a chief executive who had pledged a substantial investment of £250,000 were thwarted when they were unable to raise the agreed funds, leaving us in a challenging position.

“The delayed opening of our shops meant we missed out on projected revenues during the busy run to Christmas, opening much closer to the typically quieter months of January through March.

“However, despite these setbacks, we have not been deterred. We have implemented strategic measures to address our financial challenges and positioned ourselves for future success. Through rigorous cost-cutting measures and operational efficiencies, we have successfully reduced our production costs. This includes manufacturing more of our fillings in-house and incorporating seasonal ingredients that are more cost-effective. As a result, after experiencing losses in December, January and February, we achieved profitability in March through these production savings.”

Looking to the future, he said: “We are committed to overcoming these challenges and are confident in our ability to navigate these turbulent times.”