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Fashion retailer Ted Baker has reported flat first-half profits, despite a strong performance by its retail division.

Interim results released by the company show that the fashion chain's pre-tax profits totalled £7 million in the six months to August 11th, the same level reported for the corresponding period of 2006.

But Ted Baker said sales across its retail division were up 15.1 per cent over the year, climbing to £45.4 million.

In contrast its wholesale sales slumped by 4.1 per cent to £20.8 million. Ted Baker said the drop may have been caused by "challenging conditions" faced by some of its customers in certain product categories.

The company also said sales across the division had been hit by action it had taken in respect of wholesale customers it considered to be "no longer appropriate for our brand".

Nonetheless Ted Baker, which began trading as a Glasgow shirt specialist in 1988, is confident about its future prospects.

The fashion brand said the initial response to its autumn and winter collections had been "very positive", with retail sales for the first seven weeks of the second-half up 12.5 per cent on the corresponding period of last year.

Ted Baker said that its menswear sales climbed by seven per cent to £36.4 million over the first-half, while womenswear sales lifted by 10.7 per cent to £26.9 million.

The company added that it was pleased with the performance of its standalone womenswear store in London's Covent Garden, which opened in April, and was considering whether to launch similar outlets.

Commenting on the interim first-half results, Ted Baker chief executive Ray Kelvin said: "I am delighted to report another excellent performance for the group as Ted Baker's attention to detail and high product quality continues to drive the growth of the brand.

"The board is confident in the outcome for 2007 and looks forward to the future with confidence," he added.