Flying Brands has suffered a difficult first quarter with like-for-like orders excluding businesses acquired in 2010 slumping 19.8%below last year.

For the period to April 1, the multichannel retailer reported overall group orders of £10.8m, marginally ahead of the previous year at £10.7m.

The retailer said that it believes its strategy for transforming the business remains the right one but “the continuing under-performance in the traditional flowers business and the recent decline in our bird food business means that profits for this year will be materially below market expectations”.

It said: “We will need to renegotiate the terms of our banking arrangements and we will be commencing discussions with our lenders very shortly.”

The flowers and gifts division performed “materially below our expectations”. Orders in the period were £3.4m, and this includes contributions for the first time from Flowers Direct and Drake Algar. Like-for-like orders were 14.7% below last year.

The garden division had a mixed start. The bird food business has seen “very challenging trading conditions” and suffered from competition from supermarkets and garden centres. Orders in the period were £0.8m, down 33.5% on last year. Profits are below expectations and the retailer does not expect trading conditions to improve in the short term.

Gardening Direct orders were £5.5m.

Flying Brands said it had a challenging March with sales materially below expectations but it said April has started well. It said: “It remains to be seen whether we can claw back at least some of that under-performance.

“We reduced our marketing expenditure in off the page advertising during the first quarter to reflect the lower demand but are monitoring the market to make sure we take advantage of any perceived upturn. We do not now expect the financial performance of the business in the first half of the year to be better than last year.”

Its new site Dealtastic remains in its early stages, and it said it improves from week to week and has started to see increased traffic, although it has not yet seen a significant increase in weekly sales.