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.
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.