The clothing group said margins were 1 per cent lower as a result of the increased markdowns needed to clear stock. Stock levels are in line with plans.
Alexon Brands like-for-likes slumped 5 per cent with gross margin 2 per cent lower than the previous year.
While Eastex and Dash performed well, the retailer said a poor response to Alex & Co and Minuet's ranges necessitated aggressive markdowns.
Bay Trading sales were 2 per cent down like-for-like with improving margins. Menswear delivered a solid performance with like-for-like sales down 1 per cent.
The retailer anticipates operating profit for the full year to the end of January will be in line with market forecasts.
Investec analyst Mark Charnock said: 'With loss-making Dolcis now sold and loss-making Mandolin also being closed in the next month, the year ahead should see good recovery in profits.'
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