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Profits ahead at up-beat Liberty

Liberty, the upmarket retailer which has its flagship store on London's Regent Street, shrugged off weak retail figures yesterday with improved profits and an upbeat statement on current trading.

Patrick Austin, chief executive, said like-for-like sales in the 22 UK branches were running 5 per cent ahead of last year with the Regent Street store doing even better. "Customers are showing a reluctance to spend freely but we have made a solid start this year. A lot still depends on Christmas and the winter sale period."

The new outlet at Heathrow's Terminal Three has exceeded the most optimistic forecasts and three more will be added this year, at Terminal One, Stratford- on-Avon and Fenchurch Street in London.

Costs at the Muji joint venture have been reduced and sales are improving. Three more Muji branches will open this year, taking the total to seven.

In the year to January the group saw pre-tax profits improve from £3.2m to £4.1m on sales up at £84m. Profits were boosted by £547,000 of exceptional items, including a £1.1m rate rebate and costs of £581,000 relating to the closure of the New York store.

After failing in the US the company is nervous about the export potential of the Liberty brand. "Tourists come to England and buy Liberty but they don't abroad. We've learnt by out mistakes."

Liberty's problem division remains the loss-making textiles business that has seen sales decline for six years in a row. The division was run by Oliver Stewart-Liberty, a descendant of the founding Liberty family, who stepped down earlier this month. Mr Austin says the division is responding to new management but will still lose money this year.

Liberty has been under pressure from some shareholders in the past few years to transform itself from a sleepy, family-run company, to a more dynamic retailer. Badgered by Brian Myerson, whose UK Active Value Fund is trying to force the Signet jewellery chain to sell off parts of the business, Liberty has appointed non-executive directors and enfranchised the shares. Mr Myerson still holds 15 per cent of Liberty's shares.

The full year dividend is maintained at 7.2p. The shares remained unchanged at 238p.