Profits at Selfridges, the upmarket department-store chain, are on track to exceed £100m in its centenary year, buoyed by demand from wealthy foreign tourists and day-trippers to London.

The group, which also has stores in Manchester and Birmingham, notched up trading profits of £88m last year. It has already got off to a strong start in the festive season with sales of toys up 27% on last year and Christmas decorations showing an increase of 36%.

Selfridges said that handbags, party dresses, shoes and beauty products were booming as women opted to “self-gift” and treat themselves before Christmas.

Children’s clothes are also selling well and the average spend per customer across the Selfridges stores is higher than last year.

In contrast to its rivals, such as Debenhams and House of Fraser, Selfridges has not resorted to big discounts to attract buyers.

Paul Kelly, the group’s chief executive, said that Selfridges had defied the credit crunch thanks to a combination of strong operational performance, great products and regular in-store entertainment, such as book signings and ice-cream making demonstrations.

He added that Selfridges’s strong balance sheet, with little debt, had allowed it to focus wholly on shop-keeping.

“We’ve been able to concentrate on our own business where other companies have been distracted because they have been highly leveraged,” Kelly said.

For the first time, Selfridges will this year sell real Christmas trees outside its flagship London store on Oxford Street.

The business, owned by Galen Weston, the Canadian billionaire, is preparing to launch a website selling a selection from its fashion, food and cosmetics ranges.

Kelly said that even during these tough economic times, the group was investing about £25m-£30m a year to upgrade and redesign its premises.

In the London store it opened the Wonder Room, selling high-end and rare goods, such as one-off pieces of jewellery. This autumn it installed a giant “denim wall” offering what it claims to be the biggest selection of jeans in the UK.

A “pop up” temporary restaurant on the roof, run by award-winning chef Pierre Koffmann, proved a smash hit and the retailer is now in talks with restaurateurs about signing up a permanent operator.

Figures due to be filed at Companies House this week show that Selfridges generated £809m of sales in the year to January 2009, up 6% on the previous year. Trading profit for the same period was £88.1m, an 8% increase on the previous year.

Kelly said he expected 2010 to be tougher because of the psychological blow for consumers from increased Vat and higher taxes, but he maintained that Selfridges would continue to perform strongly.

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