UPDATE 1-Land of Leather to raise 15 mln stg, trading worse

(Adds analyst comment, detail, background, shares)

LONDON, June 19 (Reuters) - British furniture retailer Land of Leather Holdings Plc LAN.L has agreed a rescue package that will see it raise 15 million pounds ($29.4 million) by selling new shares, but said trading is still getting worse.

The struggling sofa chain said on Thursday it would sell 29.94 million new shares in a placing and open offer at 5 pence each, a 48 percent discount to Wednesday's closing price.

It said the share sale was underwritten by Investec and Kaupthing and that without it, the firm would not be able to continue trading in its current form.

Like-for-like sales plunged 35 percent in the six weeks to June 6, it said in a statement.

Furniture retailers are having a torrid time as consumers stop spending on items such as sofas in order to cope with rising food, fuel and mortgage costs. Rival ScS Upholstery SUY.L said earlier this week it was looking to raise funds.

Shares in Land of Leather, which have tumbled from 124 pence since the start of the year, were down 18.1 percent at 6.5 pence by 0755 GMT.

"We remain concerned on the outlook for the coming year and see scope for double-digit like-for-like declines to continue," Shore Capital analyst John Stevenson wrote in a research note.

"We would not recommend investors take part in the placing, or indeed, participate in the shares at all."