Two restaurants belonging to Tom Aikens, the Michelin-starred chef, have collapsed, sales of contemporary art are down and now the credit crunch has forced well-heeled consumers to turn their back on another traditional favourite — the Aga.

Aga Rangemaster revealed yesterday that sales of its famous cast-iron cookers are running 15 per cent below the levels of a year ago as the economic turmoil forces Middle England to think twice about spending £7,000 on an oven.

William McGrath, Aga's chief executive, said: “We can't defy gravity when consumer markets weaken.

“Clearly we have a more traditional customer, Princess Anne was in the factory the other day and she has an Aga, but I don't think there are many people who can ignore what is going on in the economy.”

Shares in the group fell 18p, or 18 per cent, to 85p — the lowest level for nearly 25 years. The shares were trading at more than 410p a year ago.

Panmure Gordon cut its profit forecasts for this year by 22 per cent and for 2009 by 44 per cent. Oliver Wynne-James, the investment bank's consumer goods analyst, said: “It is clear the trends in property transactions, credit availability and discretionary consumer spending remain in decline.”

Aga gave warning in May that it could suffer its worst sales fall for a decade this year. At the time demand was down by only 5 per cent.

The heightened concerns about the global economy triggered by the collapse of Lehman Brothers and the Government's bailout of the banking sector could not have come at a worse time for Aga. Its peak sales period is traditionally the end of September and the beginning of October.

Aga has also suffered from the sharp fall in the number of people moving home and a 40 per cent rise in the cost of oil needed to heat some of the older cast-iron cookers.

Mr McGrath added that sales of the group's cheaper Rangemaster range of cookers had also fallen by 15 per cent in recent weeks. “We were quite glad with the way the first half of the year panned out, but across the summer we saw a broader weakening in the market. People are becoming far more cautious with their money,” he said.

Aga intends to follow suit, with plans to cut investment by about a third. More than 270 jobs have gone so far this year, mainly in the United States, where the group's Marvel business has suffered from lower sales of fridges.

Mr McGrath insisted that there were no plans to cut the dividend to shareholders next year. However, analysts said that the group was likely to be left with little alternative.

Aga's travails come despite a 21st- century makeover of the 80-year-old brand, including trials of a wind-powered Aga and a “Love Aga” marketing campaign that featured Alex James, the former Blur guitarist.

Luxury brands have been largely immune to the fallout from the credit crunch so far, but there are signs that the tide is beginning to turn. A rare painting of Francis Bacon by Lucian Freud sold for nearly £2million less than expected at the weekend. Two restaurants belonging to Aikens — Tom Aikens and Tom's Kitchen — were taken over by a private investor after falling into administration.

Mr McGrath said that Aga was reassured by continued strong interest in the brand as well as higher sales of wood-burning ovens as customers switch from oil, gas or electric models: “We have run a very serious programme of product development in recent years and that will continue.

Aga can’t

£7,000 Cost of basic Aga cast iron cooker
£1,000 running costs for a year
1922 First Aga produced
70% Of each Aga is made from recycled materials

Source: Aga Rangemaster

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