Jeweller to the stars Theo Fennell warned "disappointing" Christmas sales would hit annual results after fewer shoppers visited its stores.
The group – whose customers have included Elton John, Victoria Beckham and Lady Gaga – saw a slump in international and UK customers over the all-important festive period as poor consumer confidence took its toll on luxury spending.
Theo said the weak Christmas trading would leave full-year results "materially" below management expectations.
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But it hopes ongoing action to cut costs will help limit losses.
The warning came as Theo Fennell's private equity suitor was given yet more time to hammer out a deal by the Takeover Panel, which extended the deadline for a firm offer to February 22.
Theo revealed it was in discussions with EME in early September, which sent its share price soaring by 28% in one day.
The group, which sells jewellery designed by founder Theo, who still owns 16.1% of the company, said last month that sales fell 8% to £4.9 million in the six months to September 30.
But cost-cutting drove losses down to their lowest for four years in its first half, more than halving to £610,083 from £1.4m a year earlier.