A spokesman said Christmas, combined with the impact of exiting clothing and restructuring its international business, would 'almost certainly' result in a loss in the year to July 2005.
The department store, owned by the Weston family, said that transaction values increased over Christmas, but the shop attractedfewercustomers. Investment in marketing and branding will also contribute to this year's financial burden.
Fortnum & Mason will file accounts showing in the next few weeks flat sales of£39.6 million in year to July 11 last year. Pre-tax profits almost halved over the period to£351,000. A spokesman said like-for-like sales in UK rose 6.5 per cent, although restructuring the overseas business meant international sales fell£2.1 million, which turned an operating profit of£288,000 into an operating loss of£387,000.
Fortnum & Mason is repositioning itself as a destination for food and entertainment. It is shutting menswear, womenswear and antiques to devote more space to the categories.
RetailKnowledgeBank research director Robert Clark said the brand had been under-utilised. 'Fortnum & Mason is best-known for food,' he said, adding that it is logical that it should concentrate on this core.
For more on trading statements, see Retail Week this week.