MERCHANT Retail, owners of the Perfume Shop and Joplings chains, has entered its busiest period of the year in high spirits after reporting a sharp rise in profits.

Merchant Retail, which has 76 specialist perfume shops and a handful of department stores in the UK, including Joplings in Sunderland and Robbs of Hexham, saw pre-tax profits rise 61 per cent to £1.7m in the six months to September 29.

Chief executive Philip Newton is confident the growth will continue as the group, which also owns the "Selfridges of St Helier" A de Gruchy, moves into the Christmas season.

He added: "Subject to world events, and their impact on consumer spending, we can see no reason why we should not be reporting positively at the end of the year."

To build on the popularity of the Perfume Shop business, Mr Newton said the group would introduce a trial store specialising in skincare and makeup next year.

Merchant Retail's performance is heavily dependent on the second half, with its full-year figures reaching £8.1m last time around.

The company said the momentum of the perfume business has continued throughout the first half as sales lifted 29 per cent to £21.7m.

Like-for-like sales were ahead eight per cent during the period while operating profits in the division improved by 46 per cent to £514,000.

The department store business improved operating profits by five per cent to £1.5m.

The stores in the Hexham area bore the brunt of the foot-and-mouth outbreak, but any impact was offset by refurbishments already taking place at one outlet, while travel restrictions may have prompted customers to shop in town.

Mr Newton concluded: "We are confident that the department stores and Perfume Shop businesses are in excellent shape and well prepared for the Christmas period."