Furniture retailer Land of Leather has revealed that pre-tax profits fell by £16.2 million, from £18.5 million to £2.3 million in the year to August 3.
At£232 million, sales were steadier, declining by just over 3 per cent from 2007's£240 million.
The retailer blamed exceptional items and price-cutting in the first half of the financial year to stimulate sales volume, for the profit fall.
Like-for-like sales orders were down 28.9 per cent although 15 new stores were opened over the year, bringing the store total to 109.
The installation of mezzanine floors in existing outlets has been halted in order to reduce capital expenditure. The move is part of a broader cost-saving and cash management programme, including savings on advertising, staff costs and discretionary spending, which the company said will save in the region of£17 million this year.
Land of Leather chairman Roger Matthews warned that the first half outlook for the new financial year would be "particularly difficult due to the low opening order book and tougher sales comparatives."
House broker Kaupthing said that the results were in line with expectations.
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