FLOORING firm Carpetright has started talks with lenders and flagged up an anticipated full-year loss as its retail sector woes continue.

In its second profit warning in less than two months, the firm said trading has remained under pressure, with like-for-like sales still falling, despite a small improvement since January.

It has now kicked off talks with lenders to ensure it doesn’t breach the terms of its bank loans and is looking at options to speed up a trading turnaround, although it said plans were at an "early stage".

The warning comes after the collapse of Toys ‘R’ Us and Maplin, which threatens thousands of jobs.

A spokesman for Carpetright, which owns Sunderland-founded Storey Carpets, said: “Although the important Easter trading period is still to come, UK like-for-like sales remain below management expectations and the group now expects to report a small underlying pre-tax loss for the year ending 28 April 2018.”

The company said its lenders had signalled they remain "fully supportive".

Carpetright sparked a shares crash in January when it warned over profits and said like-for-like UK sales had fallen 3.6 per cent in the 11 weeks ending January 13 - its crucial Christmas trading period.

It had earlier warned over the full-year outlook in December.

The chain has blamed weak consumer confidence for the sales woes, which it said has continued since the start of the year.

The group has 416 stores in the UK and 552 worldwide.

It has already been refurbishing its estate in the UK as part of a turnaround strategy and looking to offload loss-making stores, which have been dragging on its wider performance.

But, in its latest update, the group said there was a brighter outlook for its international arm, with trading in the rest of Europe improving, led by a recovery in like-for-like sales in the Netherlands.