Beales is confident of returning to profitability when the recession abates after outlining its strategy to see it through the downturn.

The department store group, which revealed a 2.4 per cent fall in like-for-likes in the 26 weeks to May 2, said that it would pursue an “aggressive” promotional strategy, drive buying-in margins and focus on cost control to increase sales while improving margins.

Gross sales improved in the latter part of the first half, with sales falling 1.6 per cent in the 15 weeks to May 2, after dropping 3.3 per cent in the previous 11 weeks.

First-half revenue was flat at £26.7m compared with £26.8m the year before. Pre-tax profit fell to £543,000 from £573,000.

Concession sales fell 6 per cent following the collapse of concessionaires including Elvi, Principles, Viyella and Adams. Beales has introduced new brands including Mamas & Papas, Joules and Chilli Pepper. It is ramping up its own-bought labels, including new fashion label Crimson and will launch George Davies’ GIVe brand.

Chairman Mike Killingley expects tough trading conditions would continue in the second half.