SHARES in Birmingham-based flooring specialist Floors 2 Go fell 16 per cent on Friday after it revealed like-for-like sales slumped by a quarter as consumers reined in spending.

The firm, which sells laminate and wooden flooring from 139 British outlets, warned annual profits would come in at the lower end of hopes after it fell victim to difficult trading.

Chief executive Simon Farnsworth said: "We have continued to see tough and volatile market conditions and this has affected our sales performance."

Like-for-like sales slumped 25.8 per cent in the second half of its financial year, while total sales were 13.2 per cent lower. Pre-tax profits for the year to December 31 were now expected to be towards the lower end of expectations. The City had pencilled in profits of between £5m to £6.3m before the update.

Floors 2 Go said it offset the impact of the sales slump with tight cost controls, and would scale back its store opening programme until market conditions improved. It will open 15 new sites this year after opening 28 in 2005.

Like many of its rivals in the sector, the company has been hit by consumers' reluctance to splash out on big-ticket items such as furniture and flooring.

However, Mr Farnsworth said the laminate and wooden flooring market still had great potential in Britain, remaining undeveloped compared with the rest of Europe.

He added: "The current market remains challenging, but we are confident that our new stores, extended range of products and improvements we have made through-out our business mean that we will benefit from any uplift in consumer spending."

Floors 2 Go began as a family business in Birmingham in 1999. It floated on the London market in 2004 and has evolved from cash-and- carry type warehouses to retail superstores in prime high street and retail parks. Shares were 4p lower at 21p on Friday.