The retailer of British soaps and fragrances has been hit by a slump in American sales

The American arm of Crabtree & Evelyn, purveyors of kitschy British soaps, fragrances and candles, has become the latest casualty of the deepening recession on the other side of the Atlantic and filed for bankruptcy protection.

The company, based in Connecticut, has 126 stores dotted across the US, employing about 950 people. It has seen sales take a tumble as cash-strapped shoppers have turned away from its high-priced gifts.

The company intends to use protection from its creditors to close some of its unprofitable stores and will attempt to renegotiate the leases on other sites. In its filing with the US bankruptcy court in Manhattan, the company revealed it had $10m-$50m of both assets and debts.

The company is expected to lose $13.3m (£8.04m) this year, compared with a loss of $8m in 2008, as revenues have declined to about $100m from $107.5m in the year to the end of September 2008.

Crabtree & Evelyn’s acting president, Stephen Bestwick, says consumers have reined in their spending in the tough economic climate and admits there has also been a “disconnect” between executive pay and the performance of the company.

“These challenges, combined with its recent declining revenues and operating losses, have severely impacted the debtor’s ability to operate successfully,” he said.

It is just the latest retailer to suffer from the effects of the recession. High-class homewares and jewellery retailer Fortunoff, based in Long Island, filed for protection in February before going into liquidation. This side of the Atlantic, the recession has claimed a clutch of retailers including Woolworths, MFI and Zavvi.

All members of the Crabtree & Evelyn Group, which has stores in more than 40 countries, operated as independent businesses, a spokeswoman for the group’s British HQ stressed, and its businesses outside the US would not be affected by the Chapter 11 filing. The UK business continues to succeed and expand, with two new store openings planned in the coming months.

“The Crabtree & Evelyn business remains strong in markets across Europe, the Middle East and Asia (EMEA),” said Catie Callender, managing director of the company’s EMEA business. “There will be no change to our operations as a result of the Chapter 11 filing in the US.”