The UK’s celebrity jeweller failed to protect itself from havoc created by the credit crunch in various industrial sectors of the country.

Theo Fennell witnessed disastrous Christmas with December sales down by 21% than previous year on like-for-like basis. The jeweller which boasted of customers like Elton John, Naomi Campbell and David Beckham amongst others would be making a loss in the year ending March 2009.

Theo Fennell will no longer be running its luxury watch counters at Harrods. However department store’s contract has been extended by 3 years and jewellery counters will continue doing their business as usual.

Theo Fennell’s City shop in Royal Exchange, where an emerald-cut three-stone diamond ring costs £39,500, and main store in South Kensington, witnessed sharp fall in sales. The firm is well known for diamond-encrusted crosses and skull rings.

International sales of the firm which remained flat during the year forced it to review its plans of international expansion. In order to reduce borrowings drastically and cut down costs it has decided to shrink business.

Theo Fennell will focus on its brand in the UK and international markets such as Russia, Middle East and former Soviet Union countries where it already has concessions and franchises. It plans to open concessions in Kuwait and Dubai.

The company registered loss of £840,000 in the first half as against £434,000 profit a year ago partly on account of cost of international expansion. Sales fell 20% to £10.2m in 6 months. However it is expecting improvement in performance following business revamp next year.

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