Jeweller to the stars Theo Fennell was forced to issue a profits warning on Friday after sales of its five-figure statement pieces faded during a "disappointing" Christmas.
Theo Fennell, whose pieces are worn by Victoria Beckham, Kate Beckinsale, Naomi Campbell and Elton John among others, had produced an upbeat statement in December, saying it had cut its interim losses by more than half.
At the time, chairman Rupert Hambro said in a statement: "The major focus of the business is to increase sales, which will return the company to profit."
But Friday's statement revealed results for the year to March would be "materially below" management expectations.
"The company experienced a disappointing Christmas trading period due to a challenging UK consumer market, an uncertain economic environment and a lack of footfall to the stores," it said.
Company Watch's business analyst Nick Hood told the Huffington Post UK Theo Fennel had been struggling to make a profit for "many years, with it's last positive territory recorded in 2008.
"Despite suggestions that the luxury retail market has been untouched by the squeeze on consumer spending evident in some other retailers' Christmas trading, it looks as though some celebrities locked away their platinum credit cards. Theo Fennell blames a lack of footfall and the poor economic outlook, but perhaps there is a limit to how many takers there are for silver toe separators or jewel-encrusted skulls," he said.
“There must be concerns at the financial position in which Theo Fennell finds itself, with a long term trend of losses contributing to a health rating of only eight out of a possible 100. Although high inventory levels are part and parcel of the jewellery trade, the company reported stock of £8 million in its last results against an overall net worth of only just over £5 million. This would not be an issue for a profitable business, but some of the ratios in its balance sheet are starting to look distinctly strained."
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