Luxury jeweller Theo Fennell has plunged to an annual £3.3 million loss after the global financial crisis hit demand among its big-spending customers.

The company - popular with celebrities and known for its diamond-encrusted skulls and solid silver Marmite lids - blamed the economic climate and unwise decisions by previous management for leading to the “significant loss”.

The deficit compares with a £1.4 million profit a year earlier.

The jeweller conducted a major boardroom clearout in June, which saw founder Theo Fennell return to the company while former managing director Barbara Snoad was brought in as chief executive.

Group turnover for the year to March 31 dived to £21.8 million from £28.06 million in the previous 12 months.

The company was also hit by a £1.3 million write-down linked to development costs, provision against obsolete stock and the closure of some store concessions.

Chairman Rupert Hambro said current trading has not shown an improvement but said the company was convinced the worst conditions have now passed.

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