Danish furniture retailer Jysk has increased sales in a difficult market while shaving a third off its losses.

The retailer, which opened its fifth UK store in Bolton in October, narrowed pre-tax losses from £2.7m to £1.8m in the year to August 31, 2010, its second full year of trading. Turnover jumped 20% to £2.96m.

Jysk UK sales and marketing manager Dara Goolsby said: “We’re starting to make a mark in the UK.” She said brand awareness among British shoppers was improving.

Sales since the year end were “still up”, but growth had “not been particularly easy” in light of the snow and the tough economic environment, including rising costs of raw materials.

Jysk, which launched in the UK in spring 2008, had ambitious plans to open scores of stores in the UK, but has not opened stores as quickly as it had first hoped.

Goolsby conceded that the expansion “hadn’t been as quick as planned” but said Jysk had adopted a cautious approach because of a lack of attractive space as well as the wider economic conditions.

However, Jysk plans to open three to four new stores this financial year, concentrating on retail parks in the northwest.

In documents filed at Companies House, Jysk said it had “massively outperformed the industry”.

Goolsby said that Jysk was benefiting from the realignment of its product mix. She said losses had narrowed after a “focus on making operations efficient”.

Goolsby added the UK chain benefited from the relationship with its parent, which has about 1,700 shops in 34 countries, and turnover of €2.15bn (£1.85bn).

“Our buying power as a group means we can pass value onto the customer,” said Goolsby. Jysk will absorb some of the VAT rise, which came into effect on Tuesday.

Goolsby said Jysk’s Bolton store - its largest at 19,000 sq ft - was performing “really well”.