Luxury furniture retailer Smallbone has secured a £5.9m financing package after revealing it had a challenging fourth quarter in 2008.

The retailer ended 2008 with a forward order book down 6 per cent year on year to£39m.

Group sales rose 10 per cent to£61.8m, including the four month figures from the acquisition of Christopher Peacock Cabinetry in September.

Due to increased cost base of the group and re-structuring costs, EBITDA for 2008 will be about 45 per cent of its EBITDA of£5.1m notched up in 2007, it said.

The retailer said in a Stock Exchange announcement: “The directors are pleased to report that good progress has been made and continues to be made in cutting production capacity and overheads across all its operations in order to generate positive cash flow and profitability in 2009, even assuming that demand levels do not improve.”

The retailer has secured a financing package of up to£5.9m of working capital to support its operations going forwards.

Lenders Barclays Bank has extended the retailer’s debt facility and deferred loan repayments. Barclays Ventures will also be granted a million warrants over shares at 5p each.

Smallbone executive chairman and chief executive Charles Smallbone said: “Along with many global brands, we recognise that we are facing the most challenging trading environment that we have seen for many years. This committed financing package provides us with the flexibility to ensure that the group can maintain its pre-eminent market position through these tough conditions.”

Smallbone has appointed Christopher Peacock as president and chief executive of Smallbone Holding in the US.