Stylo posted first-half losses after tax of £9.3 million, up from £7.5 million in the red during the same period last year, and revealed it will slash jobs at the business.

The retailer said it is taking “mitigating actions” to address the potential for sales to fall “below current expectations”, including cutting jobs.

In its interim statement today, Stylo said: “The board are conscious of a number of material uncertainties surrounding future performance, which are driven by the state of the UK economy and the prospect for a prolonged period of reduced consumer spending.”

It added: “As such it is harder than usual to assess the impact of these conditions on our plans .”

The retailer said the resultant actions, which include reducing headcount levels, reviewing product ranges, cost-cutting and increasing the focus on its concessions business, will continue in to the second half of the year.

Total sales increased 5.7 per cent to£105.7 million in the 26 weeks to August 2, reflecting the effect of concessions in Bay Trading and sales of Dolcis products in temporary stores.

The performance represents a 3.2 per cent slump on a like-for-like basis, which Stylo attributed to a poor summer and the economic environment.

Stylo ended the period with net assets of£25.2 million – down from£37.9 million year on year – and net debt of£45.8 million, an increase on the£42.2 million recorded for the same period last year.

The retailer said it benefited from the administrations of Dolcis, Stead & Simpson and Faith by running the Bay Trading concessions and acquiring Dolcis stock and the brand name, which is being introduced to Stylo’s Barratts stores.

Chairman and chief executive Michael Ziff said the loss reflected “the exceptionally difficult retail and economic climate in which we operate”.