EBTM, the online retailer of music inspired fashion, has revealed losses of £435,352 before interest, tax and depreciation in the six months to October 31, 2008.

This compares with a profit of£237,274 at the same period last year.

Sales have plummeted 49 per cent to£1.8m, driven by weakness in the wholesale market, predominantly in the UK and Spain.

Gross margin slid to 44 per cent, compared with 47 per cent at the same period last year.

Its non-recurring costs amounted to£138,068.

The retailer incurred reorganisation costs of£270,758 in the period, following redundancy costs and acquisitions of Core Brands Group and Twenty Four Seven Trading in May 2007.

A restructure between May 2008 and October 2008 resulted in a 23 per cent reduction in headcount and annualised total savings of approximately£600,000.

In a statement the retailer said: “Trading was weak during the period and revenues were substantially down year on year. The group has suffered from substantial non-recurring costs during the period against the backdrop of a very difficult economic and credit environment."

Trading in the online retail division was “well below” management expectations with net sales in December down 33 per cent year-on-year.

The retailer added: “Although the directors believe that the disappointing level of online sales over the Christmas period was a short term problem caused by the overriding macroeconomic environment, this, together with the ongoing challenging conditions in the wholesale division, has consequently had an impact on the limited financial resources of the company.”

Earlier this month the retailer issued a profit warning and said it is “evaluating strategic options to rebuild the financial resources of the group and long term shareholder value. This may include a disposal of part, or all, of the group”.

EBTM added today it believes it will deliver “long term value to shareholders and is evaluating its strategic options to deliver this”.

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