Sales are up at House of Fraser

The approaches came both during and since its recent takeover talks with the Scottish entrepreneur Tom Hunter.

However, chief executive John Coleman said none of the approaches - including the possibility of a management buy-out - were taken seriously.

And he did not believe any would lead to a firm offer for the group.

Expensive tastes

The retailer, which fought off a bid approach from Mr Hunter in December, said profits were up 3.5% to �26.5m for the year to 25 January.

But after taking widespread refurbishment costs into account as well as the cost of fighting the takeover, profits fell to �17.8m.

House of Fraser, which owns the Army & Navy, Rackhams and Dickens & Jones stores, said fighting the hostile bid had cost it �1.3m.

Revamping a number of stores has also been expensive.

The group is spending �30m on its biggest store, Rackhams in Birmingham, and said it had already seen a 6% uplift in sales.

But it also spend �2.2m on closing stores in Aberdeen, Dundee and Perth.

House of Fraser said it was now ready to reap the rewards of its store improvements and that it had identified �7.5m in cost savings.

But while same-store sales rose 2.6% in the year to January, they were up just 0.6% in the subsequent seven weeks.

Rising costs

House of Fraser said cost savings were needed to offset rising pension and insurance contributions as well as rent increases.

The retailer has had to find funds for a �1m increase in its pension charge to �3.3m.

It plans to open new stores in the City of London, Dublin, Croydon, Norwich, Maidstone and Belfast within the next four years.

But Mr Coleman reassured investors that they would continue to receive a dividend. The payment for the year to January remained flat at 5.5p per share.

"We've paid the dividend in much tougher times than this.

"If we didn't cut it then, there's absolutely no reason why we'd cut it now." House of Fraser shares rose 3% to 69p on news of its profits, which were slightly higher than analysts had anticipated.