Two of the best-known names in Britain’s high streets are facing possible extinction as they struggle to keep pace with change in the technology products market.

Jessops, the specialist camera retailer, issued its third profit warning in three months, while Woolworths reported a “worse than anticipated” 6.6 per cent slide in underlying sales, leading to calls from shareholders for a break-up of the group.

A shareholder, who declined to be named, described the sales slide at Woolworths as “awful” and said that news of an increase in average net debt from £37 million last year to £113 million was “alarming”. “Clearly, things are going from bad to worse,” he said. “They need to split the business.”

However, Trevor Bish-Jones, Woolworths’s chief executive, resisted calls for a break-up into its entertainment and retailing elements. “A break-up would not help the stores return to profitability,” he said.

Woolworths, which shocked the City in December by becoming the first retailer to issue a preChristmas profit warning, said that pretax profits for its year to February 3 had plunged 74 per cent to £16 million as its high-street stores suffered from competition from supermarkets and from price deflation.

Sales rose by 4 per cent to £2.7 billion during the year and the company said that it will hold its final dividend at 1.34p. The shares closed down ¾p, or 2.3 per cent, at 31¾p.

Mr Bish-Jones called the performance of the retail arm “disappointing”. He added that the main cause was not a failure to control costs, but underlying sales performance, which was “worse than expected” because of freefall in prices of entertainment products, including CDs and music DVDS. The company said that sales of confectionery were also weak.

Mr Bish-Jones announced plans to launch a low-price range of goods in May to compete in price against Tesco’s value range products.

Meanwhile, Jessops seemed to be in financial trouble last night after a fresh collapse in profits and a boardroom clear-out. The shares plunged nearly 70 per cent, falling 31½p to 15p, after the group slashed profit forecasts for the third time since January and parted company with its commercial director.

Banking sources suggested there was “a real danger” of Jessops breaching its banking covenants as the retailer reiterated it was seeking extra funds from its bankers to cover its working capital costs for the autumn. However, Jessops insisted that it had the “continued support of its bank” and that discussions were ongoing.

The retailer ousted Robin Whitbread, commercial director, with immediate effect, while Gavin Simonds, its nonexecutive chairman, said he would step down in May. Chris Langley, chief executive, said that he would lead a review of the company, which would “examine strategic options to reconfigure the business”.

Jessops, which is struggling to maintain sales amid a plunge in demand for digital cameras, said the market for digital compact cameras was down 16.3 per cent in February on the previous year. The group said that its like-for-like sales were down 5.2 per cent in the past four weeks, with margins 4 percentage points down in the first half.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive