Designer goods and hi-tech equipment drove sales higher during the Christmas period at two of the best known department store groups in the UK.

House of Fraser reported buoyant sales over the past seven weeks, up by 7.2% compared with the previous year.

While the upmarket Selfridges group says Christmas sales were also good, rising 8% at its stores in London and Manchester.

Both companies said they were optimistic about the outlook for this year, though some analysts were more cautious.

Lower discounts

House of Fraser said its gross profit margins rose along with the sales increase, up just under half a percent.

This was mainly due to lower discounting levels across all areas of merchandise, deputy chief executive David Adams said.

"The significant sales growth over the Christmas period maintains the very strong trading performance House of Fraser has achieved throughout the current financial year to date," said chief executive John Coleman.

"We are cautiously bullish about the outcome for next year; we think we've got things in place to do well," he said.

House of Fraser, which has 51 stores in the UK, saw sales soar at its DH Evans shop in London's Oxford Street which was recently revamped to the tune of �20m.

DH Evans' sales rose 60% during the last six months, the company said.

Tourism dips

Selfridges, meanwhile, warned that the winter sales at its flagship store in Oxford Street could hurt its profit margins.

More products have ended up in the winter sales at Selfridges because the Oxford Street store "faced a period of challenging trading after 11 September" as tourists stayed away from London, the company said.

"The mark down issue we had in the second half was a one off. It relates completely to the events of 11 September so we are not anticipating it recurring," said finance director Peter Williams.

"Oxford Street had a game of two halves -- September and October effected by the problems in America and then a good Christmas," said chief executive Vittorio Radice.

Nevertheless, "our business has performed well despite the difficulties specific to London", he said.

Ambitious

Looking ahead, Selfridges plans to open a second store in Manchester in the autumn, as well as one in Birmingham next year.

Mr Radice said he had "confidence in our strategy of opening regional flagship stores" following strong results from its existing Manchester store at the Trafford Centre.

In London, the retailer hopes to go ahead with a previously announced �300m revamp of its Oxford Street store.

Mixed reaction

Investors gave the department store groups' trading statements a mixed response.

House of Fraser shares had gained almost 5p to 89.5p by 1320 GMT, on the back of the rising sales.

But shares in Selfridges fell 9p to 317.5p as investors continued to worry about the effect of declining tourist numbers in London.

Ahead of Christmas, many analysts had feared that the economy was in the doldrums, expecting weak consumer spending as a result.

Consequently, the department store sales were better than expected.