The company said like-for-like sales in the six weeks to June 6 were down 35 per cent on the same period last year.

It admitted it could not continue to trade in its current form without the placing of 30million shares. The stock tumbled 3p to 5p. Directors will buy nearly 6million shares.

Chairman Roger ­Mat­thews said: “This fund­raising package will support our continued trading through the toughest environment for furniture retailing and other big-ticket retailers for many years.”

Costs have been cut on advertising, site renovations and expansion plans. “The business is looking to make a £2million profit this financial year, has £5million in cash and no debts, so it is in a better position than many,” said a spokesman.

Shore Capital analyst John Steven­son  predic­ted its “double-digit declines” would go on.