Strategic Retail losses deepen as consumer confidence dives

The unaudited figure compares witha loss of£26,000 for the same period last year.

The soft furnishings, furniture and DIY retailer's like-for-like sales fell 6 per cent across its three brands, Fads, Texstyle World and Leveys. Plans for new store openings have been cancelled.

Texstyle World was down 11 per cent on a like-for-like basis, which Strategic Retail said was “especially disappointing” compared with trading in the 53 weeks to March 1, when like-for-likes were up 2.5 per cent.

Fads stores were down 2 per cent on a comparable store basis.

Gross margins declined from 49.2 per cent to 47.4 per cent, while distribution costs increased.

In a statement the company said: “With the events in financial markets across the world in recent months, consumer confidence has reduced substantially. As a consequence, trading conditions have deteriorated significantly in the UK. The board of directors is taking all appropriate measures to deal with the current challenging economic environment and is maintaining a regular dialogue with the company's bankers.

“We have had to look very carefully at our strategy in response to this significant deterioration in trading.

“Our revised strategy has been to try to reposition the sales offering in the stores towards discount products as demand has diminished for more expensive products. This transition has been difficult and profit has suffered due to the necessity to generate cash.”