ScS Upholstery said the collapse of furniture chain Courts helped drive shoppers into its stores during the January sales.

ScS, which has 63 stores in the UK, said like-for-like sales were 11 per cent up in the first 18 weeks of its financial year, following a nine per cent rise in the previous eight weeks.

But despite the impressive results, it sounded a note of caution about possible challenges that weaker consumer confidence may present to the retail sector.

The company said it had gained extra market share since posting final results in November, boosted by the demise of Courts and favourable weather conditions during the sales.

Courts went into administration in November after experiencing flagging sales in the UK, where consumers have been reducing spending on big ticket items. Retail turnaround specialist SB Capital later took on a number of its stores.

ScS chairman Mike Browne said: ''We are delighted to have started the financial year with such a strong performance.

''However, while current trading remains strong, we are conscious of reports of uncertainty in consumer confidence and the possible challenges that this could present to the retail sector in 2005.''

Analyst Matthew McEach-ran, at broker Investec Securities, said the performance was significantly better than expected and upgraded full-year profit forecasts by £750,000 to just under £17m.

ScS said it planned to open stores at Watford, Barnsley and Chesterfield in the next few months.

It is also moving its Leeds operation to a more prominent site on the same retail park.

The company was founded more than 100 years ago and specialises in sales of lounge room sofas and chairs, particularly fine leather.

It recently launched an advertising campaign featuring former Spandau Ballet singer and Eastenders actor Martin Kemp.

In its last financial year, pre-tax profits rose by 64 per cent to £14m.