Department store chain Beales has recorded a full-year pre-tax loss of £1.52m and revealed resilient trading over Christmas.

At the time chief executive Tony Brown joined Beales in June, the City had forecast that the retailer would make a£2m full-year pre-tax loss.

Losses at Beales widened during the year to November 1 from£1.39m in 2007. Like-for-likes slumped 7.8 per cent and total sales fell to£47.9m against£58.8m the year before. Gross margins during the year grew to 54.9 per cent from 54.2 per cent.

The retailer said like-for-like sales in the 11 weeks of the current financial year to January 17 – and including the crucial Christmas trading period - were 3.3 per cent below the previous year.

The retailer has renegotiated its bank facilities, with the bank providing a£9m two-year loan facility and an operating overdraft. However, chairman Mike Killingley said the challenging year ahead may mean the retailer has to renegotiate a covenant during the year.

Killingley said: “This creates a material uncertainty which may cast doubt on the group and company’s ability to continue as a going concern.

However, he added: “The trading strategies we are implementing, coupled with further cost reductions and, if necessary, the potential for us to dispose of assets to reduce our borrowings, provide a reasonable expectation that the group and company has adequate resources to continue in operational existence for the foreseeable future.”

Brown, who is eight months in to his turnaround strategy to drive the retailer’s promotional trading strategy, improve margins and manage costs, said: “2009 will be more difficult than 2008 with the credit crunch deepening and consumer confidence continuing to decline. This coupled with the weakness of the pound against the dollar and the Euro, which affects our buying and therefore our buying in margins, will create further challenges.

“We have plans in place to reduce the effect of what can be described as the perfect storm of a downturn, a strong balance sheet and a good relationship with our bank.”