Mosaic is to focus on overseas expansion to drive sales after notching up a 6 per cent increase in first-half EBITDA to £33.4 million.

For every store the fashion group opens in the UK, it will open two overseas.

The retailer, which counts Karen Millen, Oasis, Principles and Warehouse among its brands, debuted in seven markets during its first half to have 1,760 stores in 44 countries.

Chief executive Derek Lovelock said the UK retail market was likely to remain “tough” throughout 2009 and 2010, but that the Mosaic brands were “well positioned to increase their international sales”.

Group sales were flat at£410 million – up 5 per cent excluding the divested Whistles – and overseas sales were up 14 per cent to£79 million, generating 25 per cent of the Baugur-backed group’s revenues. Losses after tax grew from£4.7 million to£12.9 million.

By the year-end, half of Karen Millen’s retail sales will be generated outside the UK.

Mosaic has, however, decided to put plans to open stores in India on hold, preferring more favourable markets such as Russia and Germany.

Lovelock said: “We are absolutely focused on overseas. It is about gaining market share.”

Lovelock said there would be “collateral damage” from the collapse of the banking markets for UK retail, but Mosaic cut its long-term borrowings by£40.4 million to£334 million during the first half.

-Baugur chief executive Gunnar Sigurdsson said the Icelandic investor “has no exposure to the Icelandic economy” after the nationalisation of Icelandic bank Glitnir and the administration of Stodir, an investment vehicle controlled by Baugur boss Jón sgeir Jóhannesson.

“For Baugur, it is business as usual,” said Sigurdsson.

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