Land of Leather’s sales orders are down by a third, a trading update said this morning.
The upholstery retailer said the ‘challenging market’ had lead to like for like sales order being down by 32.1%.
The drop, which covers the 13 weeks until last Sunday, compares with a decline of 0.9% for the same period in 2007.
Challenging market conditions
‘Market conditions have remained challenging due to the increasing demands on consumers' disposable income and the continuing credit crunch,’ the company said.
‘Actions have already been taken to reduce operating costs by approximately £11m on an annual basis, including cutting back on advertising and significantly reducing discretionary spend.’
Expansion plans on hold
The company said it would not be opening any more stores until market conditions had improved.
It also announced it had signed a deal with the Homestyle Group, part of Steinhoff Holdings, for it to take concession space in 28 of its stores for its beds division.
But the company said it was not expecting an easy time for the rest of 2008.
‘The board expects market conditions to be challenging for the remainder of 2008,
and particularly in the final quarter of the financial year where trading is against strong comparatives, but remains confident in the business' ability to increase profits quickly when consumer confidence returns,’ the company said.
Land of Leather’s share price was unchanged at 49p this morning compared to a 52-week high of 288p in September.
