Luxury furnishing fabrics and wallpapers Colefax warned that trading conditions are still extremely challenging in all its major markets and are expected to remain so for at least the rest of the current financial year.US sales, the group's most important market which represents 50% of fabric division, fell 32% in the four months ended 31 August while UK sales for the four months ended August 31 dropped 18%. European sales for the four months was down 10% and 18% on a constant currency basis. "We anticipate that trading conditions will remain very challenging for at least the remainder of the current financial year," said Colefax in Tuesday's company update.