UP to 50 jobs in the region could be at risk after high street retailer Games Workshop said it is to close 35 of its stores and shed ten per cent of its workforce.

The company, which reported a 73 per cent drop in annual pre-tax profits last year, said its sales had continued to decline throughout its European operation, and predicted its full-year results were "unlikely" to meet market expectations.

Nottingham-based Games Workshop is now beginning a cost- reduction programme, and plans to shed about 280 jobs and close about a tenth of its 347 stores as part of a restructuring programme.

The firm has seven outlets in the North-East and North Yorkshire - in Durham, Darlington, Gateshead, Harrogate, Middlesbrough, Newcastle and York - which collectively employ about 50 people.

Last night, a Games Workshop spokesman said it was too early to say which stores would close and where jobs would be affected.

The firm, which makes figurines for battle games such as Lord of the Rings, has sounded two recent profits warnings - the first last May, when it announced its profits had dropped to £3.7m, and again in January, when it said declining sales would see profits dip further.

Analysts have attributed the firm's declining fortunes on the "hangover period" from booming sales from 2002 to 2004 when the Lord of the Rings popularity was at its peak.

Games Workshop, which also has stores in the US and Australia, predicts the cuts announced yesterday, which will incur a one-off cost of £6m for the chain, will lead to savings of about £7m a year.

It will also reorganise its warehousing and manufacturing activities and look at reducing costs in its sales and office operation.