Topps Tiles has announced a further deterioration of sales as demand for home improvement items falls.

Like-for-like sales slumped by 13.1 per cent over the last eight weeks, the floorings specialist said today in a pre-close trading statement.

Topps Tiles expects to report flat total revenue year-on-year for the 52 weeks to September 27, in the region of£208 million.

It forecasts a like-for-like sales decline of 5 per cent for the period, versus a 4.7 per cent increase in the previous year.

Operating profit is expected to come in within analysts’ range of estimates.

During the year, Topps Tiles renegotiated its loan facility – for a one-off arrangement cost of£500,000 over the loan period - to include a relaxation of the covenants associated with its debt. It extended the loan period to January 2012.

Topps Tiles, which now operates from 342 stores, also completed the sale and leaseback of four freehold properties for£4 million, including a£700,000 profit on disposal.

Chief executive Matt Williams said Topps Tiles' performance was “credible” given the challenging retail environment.

He said: “Whilst we do not expect there to be any short term change to these trading conditions, we continue to have strong foundations and a sound business model which will see the business through this particular phase of the economic cycle. We are managing the business in a prudent manner by tightly controlling cash and costs while maintaining our focus on the service element of our offer."