Land of Leather's pre-tax profits drop 88% as the furniture retailer reports a full year loss of £0.4m compared to a profit of £16m last year.
Land of Leather's preliminary results for the year ended August 3, 2008 revealed that sales were down 20.5% with a like-for-like (lfl) figure of 28.9%.

The company is the latest in a line of big-ticket retailers to report financial difficulty.

Chairman Roger Matthews said that the past year "has been one of the most difficult for the retail furniture industry in many years.

"Trading conditions have been severely affected by the impact of the credit crunch on housing transaction levels, consumer confidence and spending on bigger ticket discretionary items."

The retailer, which has issued three profit warnings since Christmas, is expected to save around £17m a year by cutting advertising, staff costs and discretionary spending.

It has also decided to postpone its store roll-out programme and cancelled its dividend for the year, adding that the board "does not anticipate resuming the payment of dividends in the current year ending August 2, 2009".

The company said that it expects and is preparing itself for the challenging market conditions to remain throughout 2008 and 2009 but is pinning its hopes on the all-important Boxing Day sale trading period.

The reduction in costs, Mr Matthews said, "means the business is better placed to withstand the difficult market conditions".