RETAILER GUS has revealed falling sales at its luxury goods brand Burberry, but insists its demerger is on track.

GUS, which also owns catalogue store chain Argos, said the US terror attacks had affected it, and between September 11 and September 30 sales at its Burberry stores had slumped by 15 per cent.

The retailer said the decline in tourism and travel was a particular blow to the shops, which sell luxury and high-fashion clothes and goods.

But GUS still plans to partially float the chain by June next year.

And while the setback since last month's atrocities had affected the brand, in the six months to September 30, Burberry reported a 31 per cent jump in underlying sales.

Argos also saw an improvement - on a like-for-like basis, sales were up by 13 per cent at the half-year stage.

Updating the City ahead of its interim results - due out on November 29 - the retailer said: "Argos Retail Group has continued to benefit from strong consumer demand in its markets in the half year."

Chief executive John Peace said GUS had made "good progress" in the first half.

But he added: "The terrible events of September 11 in the United States have made the economic outlook more uncertain."