FASHION chain New Look showed its recovery strategy was on track as it reported a 15 per cent hike in half-year profits.

The Weymouth-based company launched the overhaul in June after being dogged by falling sales and profits and has already achieved annualised savings of £5 million.

The bulk of the retailer's cost cutting came from trimming its workforce by 10 per cent to around 400.

Finance director Alastair Miller said most of the job losses had been achieved through "natural wastage" at New Look's head office in Weymouth.

He added that the cuts, along with other cost-saving measures such as the move to discontinue a lifestyle range of goods, had helped boost profits.

For the six months to September 22 pre-tax profits were £27.3 million, up on last year's figure of £23.8 million.

Turnover was also up at £276.3 million, compared to £225.2 million a year ago, while like-for-like sales, which exclude new stores, were up 2.7 per cent.

Chief executive Stephen Sunnucks said: "There is still much to be done to ensure profitable long-term sales growth.

"But we are confident New Look's strengths of great fashion at great prices will build value for our shareholders."

The group opened nine stores during the first half and is aiming to open a further 13 during the second - New Look currently has 484 outlets in the UK but wants to have 550 by 2005-2006

Mr Sunnucks added: "I think we have certainly stabilised the business."

Shares in the group rose 6p in early trading yesterday to 126p and closed the day at 124.5p.