Department store group House of Fraser hopes the crucial pre-Christmas trading period could lift the gloom hanging over the retail sector.
The group - which has decided to close the recently acquired Beatties store on Birmingham's Corporation Street as part of a national restructuring programme - yesterday posted half-year losses of £4.4 million, compared to a loss of £2.9 million last year.
House of Fraser, which operates from 64 outlets, added that like-for-like sales were 4.3 per cent down on a year earlier in the 26 weeks to July 30 and the rate of decline had accelerated to 6.8 per cent since then.
But chief executive John Coleman believes consumers are likely to return to their spendthrift ways this Christmas after reining in spending since the end of 2004.
In an upbeat message he said: "We are very bullish about the run-up to Christmas. Consumers are paying down debt and increasing their savings ratios, and have money to spend.
"If they don't increase spending in November and December it will mean British households spending less on Christmas for the second year in a row, which I think is extremely unlikely."
Despite his optimism, House of Fraser nevertheless warned of an "extremely difficult trading environment".
Unsurprisingly, House of Fraser's five outlets in central London suffered much steeper falls, with the July terrorist attacks discouraging shoppers from travelling to the capital.
"From July 7 the central London stores were affected by about ten per cent compared to where they would have been had the bombings not happened," said Mr Coleman.
Asked whether House of Fraser will buy more outlets from other retailing groups, Mr Coleman said: "We've nothing planned at the minute but will monitor any situation that's out there." In April, the group bought four Jenners outlets for £14.1 million. It picked up another 12 stores after it took over James Beattie for £69.4 million in July.
House of Fraser's current store opening programme includes sites in Belfast, High Wycombe and Chester - around 660,000 sq ft of new trading space that will take the group's total to over five million sq ft.
But it is also closing some famous stores; both Dickins & Jones on London's Regent Street and Barkers store in Kensington, will cease trading in January.
Some 140 jobs will go at the doomed Beatties store in Corporation Street, which is due to close its doors for the last time in the same month.
It opened only four years ago on the site of the former C&A department store.
House of Fraser is now " reviewing a number of options" for the lease on the site, which runs for a further 30 years.
As part of the restructuring programme another 20 jobs will go at Beatties' headquarters in Wolverhampton plus a total of 145 among the other ten branches.
Seymour Pierce retail analyst Richard Ratner trimmed his forecast for full-year profits but said the group was performing well strategically.
He added: "Whilst underlying trading is soft, the acquisitions should cushion the lower contribution from the existing business.
"Fraser is doing the right thing in consolidating what is a difficult department store market."
Shares closed up 2p at 103p.