Retailer Whittard of Chelsea yesterday warned that the impact of the London bombings could affect trading at some of its stores for months to come.
In an update that sent Whittard shares more than ten per cent lower, the company said business in central London and at its tourist stores had been "materially affected" in a downturn that it fears may last until Christmas.
Whittard, which has 125 outlets in the UK including stores at Solihull, Leamington Spa, Stratford-upon-Avon, Worcester, Shrewsbury, Telford and two in Birmingham in the Bullring and the Pavilions, added that interest from overseas companies in taking over the tea and coffee specialist had waned in the wake of the July attacks.
The company remains in takeover talks as July's revelation of bid prospects prompted other parties to express an interest.
It added that though these early stage talks were continuing it was still too early to determine whether or not the discussions would result in any formal offer being made.
As well as the impact of the bombings, Whittard said it had also seen lower footfall at its stores located in retail outlet centres - a factor it blamed on customers being lured back to the high street by discounting.
That enabled Whittard to achieve a rise in sales at its high street and mall stores, although the improvement was achieved at lower margins.
Overall, Whittard said sales in the first 12 weeks of its financial year had been below its expectations. It comes four months after it disappointed investors with lacklustre figures for the Easter trading period.
It said: "Trading in the company's central London and tourist stores has been materially affected since the July attacks and the board now believes this situation is likely to continue for some time and may even adversely affect sales during the important Christmas period."
Broker Seymour Pierce immediately cut its 2005/06 profits estimate to £2.5 million from £3 million, but kept its 'hold' recommendation on the stock.
Numis, which kept a ' reduce' rating, pointed out that Whittard's sales were weakening well before the bombings took place.
It said its pretax profit forecast of £3 million for the year to May, 2006, looked optimistic and that it was likely to come down to around £2.2 million.
And it cautioned that the trading update "certainly reduces the likelihood of a quick sale of the business this side of Christmas, as potential bidders may well want to see whether the current slowdown persists into the all-important festive period".
The company has a results presentation on September 9.