Theo Fennell loses its sparkle

Theo Fennell issued a profits warning yesterday after another year of poor Christmas sales.

The jeweller, whose bling is worn by stars including Elton John and Naomi Campbell, said its full-year results would be "materially below management expectations" after "disappointing" trading over the festive period.

Shares in the business tumbled 17 per cent to 9.5p yesterday, less than half the value of the stock that directors including chairman Rupert Hambro acquired in the company in 2009. At the time, the former Hamleys chairman spent almost £250,000 buying a 6 per cent stake at 20p a share through his JO Hambro business.

But the outlook is not all bad for Fennell, which has struggled with its Christmas sales for the past couple of years. Last month, the group halved its interim losses to £610,000 and said it was looking to expand in overseas markets such as the Far East, Middle East and Eastern Europe, and cut costs.

It has also held takeover talks with private-equity firm EME Capital, which was today given until 22 February to make an offer. "The board remains positive about long-term prospects," the jeweller said.