Topps Tiles said the share placing was a "precautionary step" to ward off any further downturn as well as allowing it to pursue potential growth opportunities.

The move came despite "signs of stability" in recent trading, with UK like-for-like sales in the seven weeks since the end of September rising 2.2 per cent. But this followed a 13.5 per cent slide in the year to September 26 as the recession hit home – a period which saw a 45 per cent slump in underlying pre-tax profits to £16.3m, Topps revealed.

"Although there are signs that a level of stability is returning to our market, consumer confidence is still being impacted by the continuing economic pressures and our results reflect this," the firm said.

The Leicester-based group – which has 309 stores in the UK – has however grown its domestic market share to more than 23 per cent as rivals cut back on stores or even closed completely.