Shares in retail giant Marks & Spencer took a dive after it posted its worst quarterly trading for two years and warned of further sales woes ahead.
The chain reported a far worse than expected 2.2% fall in third quarter like-for-like sales as it said consumers reined in their Christmas spending.
M&S shares plummeted by 19% following the update, wiping £1.6 billion off the group's stock market value.
Retail experts said the shock sales drop could see M&S fall short of the symbolic £1 billion in pre-tax profits that had been expected this year.
M&S had hoped to smash through the £1 billion profits barrier for the first time in more than a decade, but Wednesday's figures threaten to bring the chain's much-heralded revival to an abrupt end.
M&S boss Sir Stuart Rose - knighted in the New Year Honours list - said market conditions became more challenging in November and December.
He added that the group would be "battening down the hatches" as trading conditions looked set to remain tough throughout 2008 and into the first half of 2009.
M&S is seen as a bellwether for the rest of the high street and Wednesday's disappointing figures confirmed fears that retailers are facing their toughest trading conditions for years.
An all-star Christmas advertising campaign - featuring Hollywood actor Antonio Banderas and supermodel Twiggy - failed to halt the group's third- quarter sales decline, which came in stark contrast to the 5.6% growth seen last year.
