Sports Direct has a 30% stake in Umbro

The company said that profit before tax was down 70% to �21.2m for the 26 weeks to 28 October in what was its "most difficult trading period" to date.

The firm, which owns the Dunlop and Kangol brands, said foreign exchange losses had also hit its results.

Revenues look set to continue to slide with England's failure to qualify for Euro 2008 likely to hurt sales of football-related items, the firm said.

The steep fall in profit came after a relatively strong 2006, when sales were boosted by the World Cup, it added.

Sports Direct is controlled by UK billionaire businessman Mike Ashley, who bought Newcastle United earlier this year.

Away kit

The firm said revenue next year would be between �30m to �70m lower because of England's failure to qualify for Euro 2008.

Umbro will now only manufacture one million new replica England away shirts rather than the three million it had planned, the firm said. Sports Direct owns 30% of Umbro shares.

"It has been an exceptionally challenging trading environment for the UK sports retail sector, with the wettest May to July since records were first kept in 1776, and the worst flooding in the UK for 60 years," the firm said.

The company took a �58m loss on foreign exchange following weakness in the US dollar. Excluding one-off costs, underlying profit before tax fell 35.2% to �52m.

The company's shares floated at 300p earlier this year, but at the close of trade on Tuesday they stood at just 84.25p.