Furniture retailer Land of Leather has issued a profit warning, after a weak start to post-Christmas Sales and appalling like-for-likes for the period between October 29 and January 3.

In a statement, Land of Leather said: “The current challenging market conditions resulting from low levels of consumer confidence are likely to continue for some time. As a result, the board expects that the profits for the year ending August 3, 2008 will be significantly below that reported for the last financial year.”

The retailer’s like-for-like sales orders plummeted by 25.5 per cent over the period, while its total sales order intake was down 16.6 per cent. Like-for-likes were only down 4.5 per cent for the same period last year.

Land of Leather said that difficult trading conditions – which the industry has experienced prior to the January Sales – have continued and the sales order intake in the first nine days of the Sale has been significantly below the board’s expectation.

It added that the strong promotional activity in the period, combined with the tendency of consumers to trade down during more difficult times, has resulted in a reduction in expected gross margin in the year to date – which could equate to an estimated full-year reduction in the range of between 50 basis points and 150 basis points.

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