Fashion retailer Alexon offered a ray of hope to its rivals after it emerged from the key Christmas season with its profits ahead of forecasts.

Despite suffering a sharp fall in sales growth over the festive period, the Dolcis-to-Bay Trading group said stocks were clearing well. It said that given its second-half showing, operating profits for the 12 months to January 25 should beat £30 million - ahead of City forecasts.

Shares in Alexon rose by almost four per cent as analysts breathed a sigh of relief the chain had scraped through the key Christmas period relatively unscathed. In the first festive sales update from a clothing retailer, Alexon said like-for-like growth was just two per cent in the six weeks to January 4, a far cry from the bumper 15 per cent growth enjoyed last year but was in line with analysts' expectations ranging between flat sales and a three per cent jump.

Fears that retailers took a battering this Christmas, as the economic uncertainty cast a cloud over shoppers, have grown in the past month. The CBI added to the gloom last week by reporting sales in the fortnight to December 18 were the worst on the high street for a decade.

But Alexon finance director Robin Piggott said: "It got a lot busier in the week before Christmas.

"Christmas 2001 was record-breaking so we are pleased to have slightly improved on then."

Alexon said while sales were slower in its Bay Trading womenswear and Style menswear chains, both Dolcis and its fashion brands performed well.

Alexon's update heralds a flurry of statements from the retail sector over the course of the week with Next and Dixons due to report tomorrow. Iain McDonald, retail analyst at Numis Securities, said: "I think Alexon's will prove to be one of the better statements.

"We will see a sharp fall in growth across the board but Alexon have managed it very well, being very cautious on the buying side. Others will have been more optimistic and found themselves in an overstocked position."