Hamleys, the UK's best-known toy store, has seen sales slide in the wake of the 11 September attacks on the US, with the bulk of the fall coming from overseas customers.

The company said that in the eight weeks since 11 September, sales overall at its flagship Regent Street store in London had slid 5%.

While domestic sales rose slightly, a 26% fall in sales to overseas visitors forced overall turnover into the red.

In the ten weeks running up to 10 September, sales overall had risen 13%, with a slim fall in overseas sales outweighed by a 23% rise in sales to British shoppers.

Christmas trade fears

"Against this background, we find it difficult to make any prediction for Christmas trade," the company warned.

The news came as Hamleys reported figures for the first six months of the financial year.

In the six months from April to September, sales overall rose 12% to �17.5m, with core operating profits up 50% to �600,000.

But the sell-off of five of its Toystack stores - and the conversion of the remaining 11 into "Bear Factory" teddy bear outlets - led to heavy costs.

That pushed the company into a pre-tax loss of �890,000 after making a �9,000 profit in the same period last year.