Hobbs’ private equity owner 3i has written down the value of its investment by 40% due to “tough trading” over Christmas.

3i revealed its 47% stake in the premium fashion retailer had lost £14m since it was valued at £35m in September 2013. This figure had already dropped from £47m in March last year.

Hobbs was forced to discount its products over the Christmas period due to the milder winter weather and the continuing squeeze on consumer spending.

3i said the market remained a challenge for a number of the companies in its portfolio as well as Hobbs but said that overall its businesses had seen a “good performance”.

3i, which bought Hobbs in 2004 for £111m, has denied reports that it is looking to sell the retailer.

Hobbs has not revealed sales figures over the Christmas period.

The fashion retailer appointed former New Look boss Phil Wrigley as its chairman in January, succeeding Ian MacRitchie who had come to the end of his three-year term after joining the retailer in 2011.