Kent-based furniture retailer Land of Leather has said it will weather the credit crunch – despite poor trading figures and dismal sales forecasts.

Trading results for the six weeks ending June 6 showed the company suffered a like-for-like sales decline of 35 per cent. Its forecasts also predicted difficult sales conditions for the year ahead.

The beleaguered company, which employs 134 at its Northfleet head office and warehouse, has announced a £13.5 million financing package – persuading shareholders to buy more equity.

A spokesman said that as part of a programme of saving on costs, staffing levels would be looked at.

The firm also announced plans to stock fabric sofas, although it stressed it would not be stocking fewer leather sofas.

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

"Whilst our value-orientated business model and product focus gives Land of Leather a number of important competitive advantages, we have taken a very cautious view of the outlook for our sales throughout 2009.

"We have reviewed all elements of our business and have been quick to make a series of significant cost and capital expenditure reductions.

"We will continue to seek to reduce operating costs in line with activity levels.

"Whilst the short term outlook for the market is very challenging, longer term prospects are positive as key market drivers improve.

"The high operational gearing of the group should enable it to significantly increase profitability when sales recover.

"As a result of the new financing package, the Board believes the company should be able to trade through this very difficult period and exploit its strong market position into the longer term."