Department store operator John Lewis on Thursday posted a sharp fall in first half profits as it was hit by higher pension costs and store modernisation costs.

The company said its pre-tax profit fell to £34 million from £44m in 2001 due to rising expenses and a £4m one-off charge related to the move of its computer centre.

John Lewis added sales climbed five per cent to nearly £2.2 billion and it is confident it can build on that growth in the second half.