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Last Updated: Monday, 14 January 2008, 17:34 GMT
Furniture firm hit by sales gloom
SCS website

Shares in sofa firm ScS Upholstery sank by as much as 28% after it reported a slump in its post-Christmas sales.

Like-for-like sales - which strip out trading from new stores - in the three weeks since Boxing Day fell 16% on the year before, Sunderland-based ScS said.

It added that pressure on consumers' disposable income meant it was unlikely to improve its sales performance.

Similar problems forced rival retailer, Land of Leather, to cut its profit forecast earlier this month.

ScS said that it would not be recommending that shareholders received a dividend this year, and added that plans to open four more stores and refurbish existing outlets were being put on hold.

Annual results would be at the lower end of market expectations, it said.

Shares in ScS sank to a 12-month low at 34 pence earlier in London trading before staging a partial recovery to end 4p, or 8.42%, lower, at 43.5p.

Credit squeeze

Firms such as ScS and Land of Leather strongly depend on their post-Christmas sales - and invest in expensive prime-time Christmas television advertising.

Such firms are among the latest casualties of the slowdown in consumer spending, which analysts say is driven by higher interest rates and household bills, as well as greater difficulty in gaining credit.

Other retailers to have struggled over the Christmas period include Marks & Spencer, clothes retailer Next and Currys-owner, DSG.

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