UPMARKET department store Harrods cheered a return to profits growth last night after recording its best sales performance for more than 150 years.

Harrods, in Knightsbridge, London, said the turnaround was driven by higher demand for luxury goods and the latest designer ranges.

Profits almost tripled to £19.9m during the 12 months to January 31, compared with £7m a year earlier. A tough start to the year was followed by the strongest second-half trading performance since Harrods was established in 1849.

This enabled the company to restore its annual pay-out to owner and chairman Mohamed al Fayed to £27m. A year ago, Harrods cut his dividend by 35 per cent to £19m in the wake of a prolonged slump in trade following the September 11 attacks.

Foreign tourists contributed only 25 per cent of annual turnover of £472.5m last year, which was an improvement on the £461.1m recorded a year ago.

Mr al Fayed said the sales momentum had continued since the end of January.

''This is testament to the unique Harrods brand and the quality of our employees,'' he said.

According to results to be filed with Companies House this week, Harrods also lowered its net debt to £295m from £317m.

Changes made to the store during last year included a Room of Luxury, offering fashion accessories by designers such as Valentino and Dolce and Gabbana.

The store also shipped in Europe's largest range of coffee machines and boosted its womenswear ranges.

The changes were initiated by new chief executive Richard Simonin, who became the fourth head of Harrods in less than three years when he took up the post last summer.