Retail fit-out specialist Styles & Wood will struggle to find a private equity buyer in the current economic climate, industry sources have warned

It follows an announcement by the company this week that it was seeking to raise money from a rights issue or a private equity sale to shore up its balance sheet.

One private equity source said: “They will struggle. I really can’t see what appetite private equity would have for a retail fit-out company, given the state of the market.”

The company was formerly run by private equity group Spirit Capital, which floated it in November 2006. It is understood not to be seeking to return to the firm.

The company’s statement to the stock exchange said: “There can be no certainty that an offer will be made, nor as to the terms on which any offer may be made, nor that it will be successful in raising any additional equity capital.”

In June 2008, Neil Davies, the former chief executive, and Gerard Quiligotti, former chairman, left the company after a failed private equity-backed management buyout. The departures came in the middle of two profit warnings in five weeks.

The failure of the 125p-per-share buyout was due to a lack of funding. Since then the market has deteriorated further and at the close of trading on Tuesday, the company’s share price was 7p.