Laura Ashley, the fashion and home furnishings retailer, was today celebrating a buoyant Christmas as it unveiled plans to restructure its European operation.

Like-for-like sales, stripping out the effect of new store space, in the six weeks to January 6 were ahead by seven per cent with the company toasting a strong performance in its home furnishings division.

In a trading statement to the City, the retailer also announced it would close its four administration offices in Europe.

While the company is still committed to opening new stores in Germany and France, it believes it can achieve £1 million a year savings by merging European office activities into bases in London and north Wales.

Around 50 jobs will be lost in Europe, although the company says it intends to increase staff numbers at its UK-based offices.

It will also open one or two new shops a month, concentrating on high street locations in smaller UK towns.

There are currently 205 Laura Ashley outlets in the UK and another 64 on the continent.

The company, which is recovering after being rescued from near-bankruptcy in 1998, warned its strategy of increasing furnishing sales had pushed overall margins lower by one per cent in the 23-week period.

Group chief executive Kwan Cheong Ng said: "We are pleased with these trading results, which demonstrate that we are making good progress towards revitalising the business.

"We remain confident about achieving a satisfactory outcome for the full year."