But business still faces challenges
Online DVD, games and music retailer Choices UK unveiled a record-breaking Christmas, with total sales up 15 per cent year on year for the eight weeks to January 13.

The AIM-listed retailer also made a pre-tax profit over this period, compared with a loss for the same period last year. The figures reflect a strong performance by its Direct to Home and Local businesses.

However, trading for the Choices UK stores remained difficult, particularly during the first eight weeks of the interim period - which comprises the first 36 weeks of the 60 weeks to July 28, 2007 - that was adversely affected by the World Cup. Despite this and the disappointing retail trading environment, the company expects to report a materially reduced pre-tax loss for the interim period.

The retailer said it is considering a strategic plan to ensure that the Choices UK stores will not detract from the value and success of other company activities.

Choices UK Local, which supplies entertainment to convenience stores, remains profitable and continues to expand its customer base. It recently won a fulfilment contract with Welcome Break for more than 60 motorway service stations and is developing other opportunities at present.

Following the successful integration of its games fulfilment business, Choices UK Direct, the retailer's mail order and internet division, returned to profitability and continues to experience substantial growth and opportunity.

The company said: 'Cost reductions continue to be a top priority for management and, as a result of further restructuring, management expects to save approximately£500,000 a year, in addition to the£3 million a year savings achieved to date.'