House of Fraser has shrugged off mounting losses to push ahead with expansion plans.

The group said increased half-year losses of �6.6m were mainly due to refurbishment at its Oxford Street and Guildford stores, but tough trading conditions in the High Street also took their toll.

Losses for the same period last year were �4.3m.

The group says it is creating 1,000 jobs through new store openings. It also plans to buy the loss-making Bentalls store in Bristol.

Improving sales

House of Fraser said new stores would be opened in the City of London, Norwich, and High Wycombe, Buckinghamshire, by 2004, and the store in Maidstone, Kent, would move to a new site.

Chief executive John Coleman was upbeat about the group's prospects.

"We have driven significant sales and market share growth in the first half, building on our position as Britain's leading retailer of designer brands.

"We have continued this growth into the second half of the year... driven by our supply chain initiatives and by our continual product innovation."

The company, which includes Army and Navy and DH Evans among the household names in its portfolio, claimed the recent fuel crisis cost it �25m in sales and �0.6m in profit.

Bentalls

House of Fraser's smaller rival Bentalls, which sold its Bristol branch for �15.6m, said tough management had helped it stem first-half losses.

In the six months to 29 July, the group made a pre-tax loss of �1.9m, compared with �3.3m for the same period last year.

Chairman Edward Bentall said reducing stock, if necessary by slashing prices, had made the organisation leaner and more efficient.

He said the proceeds from the Bristol sale would be used to eliminate the group's borrowing and for redeveloping its stores in the south east of England.