The slowdown in high street spending has hit clothing chain Matalan as it posted a fall in sales and warned of a tough future.
Like-for-like sales were down 6.3 per cent in the 26 weeks to August 27, which led to pre-tax profits falling to £ 30 . 7 million from £42.5 million in the same period last year.
And Matalan warned that in the last nine weeks likefor-like sales were down as much as 10.6 per cent as warmer weather hit demand for winter clothes such as coats and knitwear.
"The problem is in the outlook, the 10.6 per cent is pretty scary," said analyst Rebecca McClellan at brokers Exane, adding that unseasonably warm October weather was taking its toll on lines like coats and knitwear.
"It's hard to know what the impact has been in terms of the mild weather. The worry would be that there is a stock pile-up on the high street. Nobody foresaw this Indian summer and there's a worry that there's too much stock out there."
The same nine-week period last time saw the strongest growth of the year for Matalan.
Chairman John Hargreaves said: "Trading conditions continue to be difficult and there is little evidence to suggest this will improve in the near term." Matalan said it would concentrate on improving margins throughout the second half of the year to offset the slowdown in consumer spending.
Chief executive John King said: "Against this background, our business agenda will continue to focus on improving profitability and strengthening cashflows.
"A combination of these initiatives helped generate a 1.4 per cent margin uplift in the first half, and this will remain our focus for the second half."
The company, which is based in Skelmersdale, Lancashire, and has 190 stores including 15 in the Midlands, recently completed a £5.1 million restructuring of the company which cost 300 jobs but should save £15 million a year.
It also refurbished 18 stores in the first half, which resulted in a sales uplift of at least five per cent in each of them. A further 17 stores will be refurbished in the second half.
Yesterday's first-half sales figures were a shade ahead of the 6.4 per cent like-for-like fall that Matalan forecast in August, but the outlook was not as positive.
At that time the company said its performance in the eight weeks to end of August showed a more encouraging trend with a drop of 3.4 per cent on a like-for-like basis.
But it said the last nine weeks had seen sales slip by more than ten per cent compared with last year.
Matalan said first half sales of its core own brand clothes had been "more resilient" than other products.
Mr Hargreaves said: "We have made good progress in core areas such as ladies tops, skirts, tailoring, mens T-shirts and formal trousers.
" We are particularly pleased with the progress made in childrenswear, notably with our Girlswear and Back to School ranges."
Sales in the home product range were "disappointing", he added.
Seymour Pierce analyst Richard Ratner scaled back his forecast for full-year profits from £75.4 million to £62 million.
He said: "Although trade generally is being adversely affected by the weather, we believe that Matalan is being by-passed by the customers, as they can buy value in the high street or at the superstore operators.
"They do not have to go out of their way to visit a Matalan."