Jeweller to the stars Theo Fennell notched up losses of £840,000 in the six months to September 30 and revealed it will consider cutting back its expansion plans.

In a sign that the wealthy are feeling the pinch, Theo Fennell slipped in to the red after it suffered a 20 per cent sales drop to£10.2 million in its first half. Its losses compare with a£434,000 profit the year before. The slump has been partly attributed to ramped up international expansion plans.

The jeweller to the likes of David Beckham, Sir Elton John and Liz Hurley plans to open two stores in the Middle East – in Dubai and Kuwait City – next year and concessions in Jeddah, Saudi Arabia and Qatar.

Theo Fennell chairman Richard Northcott said: "Sales have been significantly impacted by the current recession and trading has been difficult.

“This is immensely frustrating given the initiatives we had planned, but given the downturn in consumer spending further expansion plans are being reviewed."

He added: "We expect next year to be difficult but are taking the necessary actions across all areas of the business to reduce our investment programme and cost base to ensure it is correctly positioned as consumer confidence returns."

The jeweller said that talks with an unnamed investor over plans to secure extra equity had progressed more slowly than expected.