Laura Ashley's struggling fashion range combined with "unlucky" weather to push the retailer's first-half profits 11% lower.
The sofas-to-wallpaper group blamed the summer heatwave and spring freeze for six months of deteriorating performance, with like-for-like sales falling 2.2% in the six months to the end of July and pre-tax profits dropping to £7.4 million.
Fashion sales slumped 6.6% on a like-for-like basis during the half, worse than the 4.8% drop seen across the whole of last year.
And the retailer admitted there is more to do to reverse falling clothing sales, with a 1.3% drop in like-for-like group sales in the eight weeks to September 21 driven by more "underperformance" from fashion.
Chief financial officer Sean Anglim said : "We know we've not got everything right. We are continually reviewing our fashion collection and trends. Fashion operates on quite long lead times.
"But we are comfortable we will get it right. For the second half we have done things better."
He said bigger rival Marks & Spencer has "thrown a lot at us" with its new star-studded advertising campaign for its autumn/winter fashion range, but added it is too early to say what the impact will be.
The retailer, which is 60 years old this year, earns about four-fifths of its sales from home furnishings.
Sales of home accessories such as bed linen and lamps fell 2.7% on an underlying basis, while decorating sales were down 1.6%.
But sales of furniture ranging from sofas to mirrors remained in positive territory during the half, climbing 0.7% on an underlying basis, and Laura Ashley said it is "encouraged" by growth in this more expensive category.
Mr Anglim, who is also chief operating officer, said it is too soon to say if Britain's improving housing market is feeding through to its home business, but added underlying home furnishings sales have risen 0.8% in the past eight weeks.
He said: "We were a bit unlucky in the first half with the weather.
"There was a long cold spell right into April and that did affect our fashion business as our ranges were geared to a warmer climate.
"Then we had that fantastic four weeks in July that had a big impact on the home business."
Laura Ashley's revenues fell 5.6% to £137.3 million during the six months, including a 3.7% fall in online sales.
The retailer closed five stores and opened two during the six months, cutting its selling space by 2.4% to leave it with 209 stores.
Mr Anglim said it will continue to shrink its footprint next year - but the contraction will "not be dramatic". He said the chain is increasingly gearing its focus to larger retail parks where there is more room to showcase its range, although he added high street locations will remain important.
"Contraction over the next five year period is probably inevitable," he said.
The retailer also opened a 49-bedroom hotel in Hertfordshire in August which showcases its products and is intended as a commercial venture. Mr Anglim said Laura Ashley will wait to see how the hotel trades before expanding the hospitality business.
Laura Ashley also has 280 franchised stores across the globe, which saw revenues fall 3.6% to £15.1 million.