Beales has warned that profits will fail to meet expectations for the year.
The 12-outlet department store group said that it continued to find the retail environment challenging. “We shall therefore fall short of current market expectations for the financial year ending November 3 2007.”
One retail pundit is forecasting a £1m loss at the retailer.
The company has seen margins come under further pressure and has suffered “significant disruption” in its flagship Bournemouth and Poole stores as they were refurbished.