House of Fraser, the designer label retailer, has warned that conditions on the high street remain "challenging" as it reported a 3.2 per cent fall in like-like-sales for the first 19 weeks of the year.

House of Fraser, which sells designer brands from perfume to furniture, was the first of three prominent high street retailers to update the City on the state of its trading. House of Fraser, reporting at today's annual general meeting, will be joined later today by Laura Ashley and Ted Baker.

House of Fraser, led by chief executive John Coleman, claimed that despite the challenging conditions, new store openings in Croydon, Maidstone and Dublin, Ireland, helped sales performance. The company also said it was making good progress integrating the profitable Jenners retail business it bought in April for £14.1 million.

It said that while its fashion sales were up 3.6 per cent on a like-for-like basis, trading in its goods for the home had been "difficult", with like-for-likes down by 1.4 per cent.

Mr Coleman said: "We are pleased with our progress in a difficult trading environment and have worked hard to manage the business effectively by focusing on stock management and further cost initiatives. We have also extended our new store pipeline with the new 140,000 square foot store in Bristol and have managed our property portfolio to reduce debt and fund growth opportunities."

As well as the new Bristol store, agreed in February, House of Fraser said today it would be opening outlets in Norwich, Belfast, High Wycombe and Chester, taking the total trading space of the group to more than 5 million square feet.

However, the gloomy like-for-like sales figures are unlikely to offer any reassurances to a retail sector that has been suffering at the hands of the downturn in consumer spending, and sentiment, amid uncertainty about the future direction of interest rates.

At the other end of the retail spectrum, Matalan, Britain's biggest discount clothing retailer, warned earlier this week that it would be cutting jobs after reporting that underlying sales in the nine weeks to April 30 had fallen by 8.8 per cent.

Rivals Next and New Look have both reported disappointing trading updates for their year so far.

Marks & Spencer, struggling to improve performance under turnaround chief executive Stuart Rose, at the end of last month reported a 19 per cent slide in its pre-tax profits for 2004 to £618.5 million from £750 million the previous year. M&S said it continued to lose market share in clothing - down by 0.5 percentage points on the year to 10.5 per cent of the market.

And William Morrison, battling to integrate its Safeway acquisition, disclosed earlier this month that annual reports for this year could fall to as low as £50 million.

In early morning trade today, shares in House of Fraser edged up to 99.5p valuing the company at slightly less than £240 million.

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