Flying Brands suffered a fall in sales over Christmas from £4.47m to £3.29m.
Sales in its online gardening products business slipped to £210,000 in the 12 weeks to December 31 2011 from £270,000 in 2010.
Sales in its Garden Bird Supplies arm were affected by the “very mild” weather and were “below expectations” at £640,000, down from £910,000.
But the retailer said the performance was “broadly in line with expectations” after it cut back on marketing expenditure, taking a hit on sales in the process.
Fly Brands reported: “In light of the general economic climate and our recent performance at Christmas, we took the decision to cut back on up-front marketing expenditure.
“This meant that sales were considerably down on last year but a combination of higher margins, lower marketing costs and a greatly improved refunds and replacements performance meant that we expect contribution to be significantly ahead of last year and broadly in line with management’s expectations.”
The company said it “remains in discussions” with potential buyers of parts of the business after revealing in December it had not received any offers for the entire group. In November it completed a refinancing process.
During the quarter revenue in Gardening Direct was £340,000 compared with £320,000 in 2010, which was ahead of management expectations.
Sales in its entertainment division Listen2 were in line with management expectations at £350,000, down from £460,000.