Department stores group, House of Fraser, is bucking the trend and set to expand, creating 1,000 new jobs over the next four years.

Despite tough times on the high street, the group says it is faring well and it is moving ahead with its plan to open more stores.

The group's results for the first six months of the current financial year out today show that like for like sales were 2.4 per cent lower, but like for like costs were held at 1998 levels.

In the first six months, fashion sales were 1.1 per cent ahead of last year, with further growth in market share.

House of Fraser say the company's supply chain initiative is reaping rewards and the group continues to build on its position as a leading national retailer of designer brands.

Chief executive, John Coleman, said today: "Our supply chain initiative is now fully on stream and has already delivered tangible benefits through higher profit margin and lower stock levels.

"Supply chain has also contributed to the increase in the proportion of full price sales we are now experiencing. Further benefits will come in the current trading period and in future years.

"The success of House of Fraser's private label brands continues to drive sales and gross profit margin and further ranges are being rolled out. Linea and our other private labels have far exceeded the targets set when we launched them just two years ago."

The group says that a key part of the strategy to improve the gross margin has been the development of high margin, high sales density, private label merchandise.

"Linea, Platinum and Fraser continue to trade strongly and to be regarded by customers as brands in their own right," says the report.

"The Group continues to reinforce its position as the leading national retailer of niche cosmetic brands. This season has seen the expansion of brands such as Benefit, Bobbi Brown and Aveda and the introduction of new brands including Caudalie skin care, John Barrett hair care and Alchemy."

House of Fraser announced on Wednesday that it had reached an agreement to buy Bentalls' Bristol store.

The move marks another step forward in the group's store opening programme. Further stores are scheduled to open in High Wycombe, Maidstone, Norwich and the City of London, while substantial refurbishment of its Oxford Street and Guildford stores will be complete this autumn.

A House of Fraser spokesman said the group's head office support system means it is more cost effective to run more stores.

By Deborah Bowyer