January’s snow has delivered a blow to the recovery of department store chain Beale after it revealed lower sales to offset improved Christmas trading.

The Bournemouth-based chain said all its stores were “disproportionately affected” by the snow, which left same-store sales in the first 11 weeks of its new financial year down 3.4% on a year earlier.

The group operates 11 outlets across the south, south east and north west - areas which were all hit badly by the adverse weather.

Sales over the key five-week Christmas period to January 2 rose 2.8% year-on-year, but snow-hit trading in the first half of January dragged sales into negative territory.

Beale also reported full-year figures showing it remained firmly in the red, although losses narrowed from £1.5m to £990,000 for the 52 weeks to November 1.

The group trades eight of its stores as Beales in Bedford, Bournemouth, Horsham, Kendal, Poole, Tonbridge, Winchester and Worthing. The remaining three trade under their own individual name – Broadbents & Boothroyds of Southport, Denners of Yeovil and Whitakers of Bolton.

The group hopes to continue the progress in 2010, in spite of caution over the consumer outlook.

Tony Brown, chief executive of Beale, said: “Whilst losses are never desirable to report, despite the backdrop of the recession we have managed to significantly reduce our losses.

“We will continue with the strategy employed in 2009 through 2010, which I believe will be another challenging year for retailers. We have set ourselves the target of significantly reducing our losses again and I am confident that we will achieve this objective despite the adverse economic environment.”

This time last year, Beale was warning of “material uncertainties” over continuing as a going concern as it faced the struggle of renegotiating its banking agreements at the height of the financial crisis.

But since then, the group has drafted in Mr Brown to lead a revival and secured a new loan deal with its banks that has put it on a firmer financial footing.

Profit margins have also been improving due to cost control and better stock buying and Beales confirmed that the first two months of the current financial year have been more profitable than a year earlier.

However, shares dropped 5% as the group added to the growing sense of caution in the sector over trading conditions for the year ahead.

Mr Brown said: “The economy remains unmistakably subdued. The fear of  unemployment, higher prices and interest rates and increased levels of tax will, in my view, continue to make our customers cautious throughout the coming year.”