Jessops has announced trading conditions have worsened "significantly" in recent weeks as it warned full-year losses would top last year's £7.5 million.
The Leicester-based camera retailer, which has five stores in the West Midlands, reported a drop in like-for-like sales of 5.7 per cent in the 41 weeks to last weekend, with the last three weeks averaging 11 per cent lower.
Jessops said the usual summer pick-up in sales had not materialised amid the worsening retail environment. Shares fell 32 per cent after the company revealed its loss before tax and non-recurring items in the year to the end of September would now be worse than the equivalent loss of £7.5 million seen last year.
At a trading level, underlying earnings (EBITDA) should still be ahead of last year's £4.4 million because of efforts to control overheads and stock levels.
Jessops said it remained cash generative and stressed it continued to trade within its existing banking facilities.
As well as reducing surplus stock levels, Jessops has sought to restore its battered fortunes by closing underperforming stores and launching "new and innovative" products.
The company, which has suffered from heavy internet and supermarket competition, has so far held its share of the digital camera market and in particular its position in the specialist digital SLR market.
Executive chairman David Adams said: "The retail environment has worsened significantly over the last few weeks but the strategy the board is implementing means that we still expect to deliver an EBITDA that is higher than last year."