Value fashion retailer Citi Trends Inc is to axe 40 jobs in its corporate offices, distribution centres and store organisation, and slow its new store opening plans.

The Savannah, Georgia-based retailer unveiled its plans today (23 September), a month after reporting a wider second quarter loss and falling sales.

It now says it only intends to open stores for which it has already made commitments. This will result in 55 new stores for 2011 and five for 2012. In July, it said it would open 55 to 60 stores this year.

"The decision to downsize was a very difficult one," said president and CEO David Alexander. "Over the past few months we have undertaken many important initiatives to turn around our business. We believe the two steps taken today help ensure our success through a very challenging economy.

The company, which operates 486 stores, expects the staff cuts to result in $3.5m in annual savings and incur $800,000 in severance charges in the third quarter.

"Despite the difficult environment in which we are currently operating, we continue to be very optimistic about the company's future," Alexander added.

Last month the retailer saw its second quarter loss widen to $10.0m in the three months to 30 July, from a loss of $0.6m the year before. Comparable store sales fell 11.9%.