Alexon, the fashion retailer behind Bay Trading and Kaliko, sparked fresh fears yesterday over the health of the high street by issuing a profit warning that sent its shares down by nearly 11 per cent.

Only hours before the Bank of England cut interest rates, the group said that it was “unlikely” to hit forecasts this year given a sales plunge in the past five weeks, and analysts believe that the group may now report full-year pretax profits of only £11.5 million, against earlier estimates of as much as £15.5 million.

Robin Piggott, the inance director, said: “The rate cut is a little bit of good news but it is unlikely to help much between now and Christmas. We are disappointed but we don’t think we’re different from the rest of the sector.”

The warning came as David Jones, the retail veteran and former chief executive of Next, said he feared that the high street would soon die out as the rapid growth of the internet changes the face of the sector.

He told Drapers, the fashion trade journal: “I am convinced that shopping in the future will be in out-of-town sites or on the internet. The high street will disappear slowly.”

Alexon’s warning is the fifth from a retailer in the past month and the third from a clothing chain. Moss Bros on Wednesday said that it would miss targets this year given the fallout from the credit crunch.

However, on the same day, Asos, the online fashion store, shrugged off the gloom and reported a 101 per cent rise in sales over the past nine weeks.

Despite Asos’s success, Mr Piggott said he believed that the slowdown would claim more victims before Christmas. Like-for-like sales across Alexon have fallen by about 12 per cent in the past five weeks, dragging sales down by 7 per cent over the past 18.

The shares tumbled 11.5p to 95.75p. In February this year Alexon turned down a takeover approach “marginally above” the prevailing share price of 112.5p. The group returned about £17 million to investors and the shares hit 250p in the summer.

Analysts believe the economic slump will open a clear divide between winners and losers over the holiday season. Debenhams, facing fierce competition from Marks & Spencer and Next, is understood to have begun a four-day 10 per cent-off sale. John Lewis announced that sales were up by 4.5 per cent last week.

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