Fresh fears of a high-street meltdown rose yesterday after it emerged that retailers have issued a record number of profit warnings in the run-up to Christmas.

Ernst & Young said retailers have been forced into 46 warnings in the year to date — up 53 per cent on 2006 — with 11 coming since the start of October alone, including French Connection, Moss Bros and Sports Direct.

The figures came as the accountancy firm revealed that the company behind Ponden Mill, the soft furnishings chain, fell into administration last week, placing 1,300 jobs at risk.

Jason Gordon, Ernst & Young senior retail manager, said there was a real concern that other retailers could hit the wall in the new year as the fallout from the global credit crunch hits consumer spending.

Markdowns in high-street stores are running at their highest level — an average of 36 per cent — as chains slash prices in a last-ditch effort to lure Christmas shoppers.

Mr Gordon said: “This is the golden quarter, a critical time for the high street, but we have never seen discounting this savage, this early.”

The CBI on Wednesday revealed that sales growth across the high street had slumped to its weakest level for 13 months.

Retail executives privately admit that trading in the past week has been much tougher than a year ago. One added: “Imagine how bad it could get in January — it won't be any easier.”

Greg Lawless, analyst at Blue Oar Securities, said it was inevitable some smaller stores would collapse.

“The internet is going like a train, supermarkets are hoovering up market share in non-food and there's ten million square feet of new retail space planned for next year just as consumers stop spending,” he said. “Something has got to give.”

Analysts still believe there will be winners as well as losers over the Christmas and new year period.

John Lewis yesterday continued to shrug off the gloom by revealing that sales in its department stores are up 5.6 per cent so far this week on a year ago, fuelled by iPods, wine and digital photo-frames.

Ernst & Young said clothing and entertainment stores had been forced into the biggest pre-Christmas price-cuts with some “brutal” discounts on DVDs and CDs.

The average 36 per cent markdown compares with 35 per cent last year and 33 per cent in 2005. Mr Gordon said stores were offering up to 80 per cent off some items.

Land of Leather, the sofa chain, said it was slashing prices by up to 60 per cent in its traditional Boxing Day sale — more than double its normal discount.

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