Retail group The John Lewis Partnership posted a 26.6% drop in first-half profit, despite gaining market share in the fashion sector.

Sales at the company, which includes department store John Lewis and high-end supermarket Waitrose, rose 3.6% to GBP3.27bn (US$5.74bn) in the six months to 26 July.

Operating profit fell 21.5% to GBP125.4m, while pre-tax profits were down 26.6% to GBP107.3m.

At John Lewis, sales were GBP1.24bn, up 0.5% on last year, while like-for-like sales declined 1%.

The department store chain posted an operating profit of GBP40m, down 34.4%.

John Lewis gained market share in the fashion sector, with sales up 5%, while John Lewis Direct saw sales surge 30%.

Updating the figures, Partnership chairman Charlie Mayfield revealed that overall sales were up 2.5% in the first six weeks of the second half, while John Lewis revenues rose 2.7%, or 0.4% on a like-for-like basis.

Sales in John Lewis had been stronger at the beginning of August, followed by "a more muted period" during the Beijing Olympics, he added.

"In difficult trading conditions the Partnership is determined to do the right thing to build our business for the future," said Mayfield.

"We've increased sales where there are opportunities - growing fashion in John Lewis and launching new ranges in Waitrose."

He added that the retailer had invested in margin to defend its market share, reinforcingly its "Never Knowingly Undersold" mantra in John Lewis.

But Mayfield admitted that the outlook for the next year or more remained "challenging", echoing the comments of other major UK retailers.