Luxury jewellers Theo Fennell yesterday posted a half-year loss after the economic downturn took the sparkle off sales.

Luxury jewellers Theo Fennell yesterday posted a half-year loss after the economic downturn took the sparkle off sales.

The group, whose clients have included the Beckhams and Sir Elton John, reported a loss of £840,000 in the six months to September 30, compared to a profit of £434,000 in the same period in 2007.

It said this was partly because of its investment programme in the first half.

Turnover was also down 20% on the same period last year, at £10.2m.

The designer jeweller, which has opened a concession in the Brown Thomas department store in Dublin this year, said it would review further investment plans in the light of the downturn.

Chairman Richard Northcott said talks were continuing with a third party interested in making a "significant" investment in the business.

But he said progress had been slower than anticipated due to the economic downturn and there was no guarantee that the negotiations would lead to a deal.

"As we mentioned in our October trading update, sales have been significantly impacted by the current recession and trading has been difficult," he said.

"This is immensely frustrating given the initiatives we had planned, but given the downturn in consumer spending further expansion plans are being reviewed.

"We expect next year to be difficult but are taking the necessary actions across all areas of the business to reduce our investment programme and cost base to ensure it is correctly positioned as consumer confidence returns."

Theo Fennell products include a £17,500 white diamond and aquamarine "Scorpion" ring and black diamond-encrusted skull earrings worth £2200.

After finishing art school designer Theo Fennell started his business on the Fulham Road in London in 1982, where the company's flagship store is today. It also has locations in Newcastle, Leeds and Manchester, alongside Harrods in London and Brown Thomas in Dublin.

The company said its partners in the Middle East expect to open new standalone stores in Emirates Towers, Dubai and in Kuwait City in 2009 as well as smaller concessions in Saudi Arabia and Qatar.

Theo Fennell said it would continue to look at opportunities in the former Soviet Union states.