Model trains maker Hornby has said some deliveries have been delayed as a result of shipping attacks in the Red Sea.
Margate-based Hornby, a more than 100-year-old business which specialises in toys and collectibles, said its sales have fallen in recent months.
Group sales over the first three months of the year were 8% less than the same quarter a year ago, it revealed.
This decline was partly driven by delays to deliveries via the Red Sea, with the movement of some container ships being pushed back from March to April.
Ongoing attacks along key trade routes in the Suez Canal have had a knock-on effect to international shipping, forcing some container ships to re-route and driving up freight costs.
Iran-backed Houthi rebels are behind the attacks in what they say is a campaign of solidarity with Palestinians in Gaza amid the Israel-Hamas conflict.
Other retailers like Pepco Group, which owns Poundland, and fashion chain Next have flagged heightened freight charges and delays due to disruption in the Middle East.
Meanwhile, Hornby also attributed lower sales to Easter being celebrated earlier in the year, affecting year-on-year comparisons.
Sales for the year to the end of March hit £56 million, slightly ahead of the previous year and driven by direct-to-consumer sales, which jumped by nearly a fifth.
However, the company said it was operating at a loss at the end of the year, with net debts nearly £10 million more than at the end of March 2023.
But it said it expects sales to start improving as it targets new customers and launches new product ranges.
“We do, however, remain cautious in our outlook due to the natural challenges facing a business in turnaround, and the uncertainty of the wider economic and socio-political factors affecting all businesses at this time,” the business said.
It comes amid wider pressures in the model railway industry, with Widnes-based Hattons Model Railways revealing at the start of the year that it is to cease trading after 77 years.