In a recent trading statement, the firm explained that while retailers are experiencing slow trading generally, toy stores are likely to be one of the hardest hit.

The British Shops and Stores Association has estimated sector sales for the second quarter, ending June 2008, to be down by 7.5 per cent.

Character is now expecting a slower intake by their customers than originally anticipated. The company is confident, however, that they have the experience to deal with the falling sales.

The statement said: “ Directors are confident that the Group will be able to deal with the effects of this downturn, not least by ensuring that inventory exposure is reduced in line with more conservative expectations for the lead up to Christmas.”

It continued: “Whilst this may limit opportunities if the economic conditions improve over the next six months, it is believed that preserving positive cash-flow and a strong balance sheet are prudent policies for the Group to follow at this time.”