Department store operator Beales has recorded a 6.4 per cent drop in like-for-like gross sales and warned there will be no uplift for the remainder of its financial year.

For the 26 weeks ending May 3, Beales said gross sales fell 14.5 per cent, reflecting the closure of the Ealing store in October last year.

Revenue for the period was£27 million, down from£32.4 million the previous year, but that figure included Beales’ Ealing store. Group pre-tax profit increased slightly to£881,000, compared with£875,000 the previous year.

Beales chairman Mike Killingley said: “The deterioration of the UK economy since this time last year has dramatically affected consumer confidence and it seems likely that the economy will remain depressed for some time.

“We have limited the impact of these difficulties by reducing our cost base substantially and we are continuing to examine costs critically to enable further savings to be made.”

Beales cut costs by£1.25 million compared with last year. Former British Home Stores retail director Tony Brown joined Beales as chief executive in June.

Killingley added: “A return to profitability, however, depends on reversing the decline in sales. Our senior management team, under Tony Brown, is developing its strategy to deliver such improvements and we will report on this strategy and its implementation more fully at the time of the full-year results.

“We do not anticipate any significant improvement in our sales performance during the remainder of the current financial year.”