BOOK store chain Ottakar's is hoping the latest Harry Potter release will revive its fortunes, after a flat year.

The group revealed yesterday that sales had fallen 1.6 per cent in the first seven weeks of the financial year.

The fall, partly due to comparisons with strong trading early last year, came after a disappointing Christmas season led to a profits warning in January.

Managing director James Heneage said he was optimistic there would be an improvement in trading conditions.

"It is too early to call on trading for this year but, unlike the fashion sector, the bookshop sector tends to be more robust," he said.

Mr Heneage said the publication of the latest instalment in the Harry Potter series, as well as a number of other children's titles, was likely to boost sales in the year ahead.

Ottakar's reported full year profits of £7.1m yesterday, up from £6.1m the previous year, but down on earlier City forecasts of £8.9m.

Despite the tough start to the financial year, Ottakar's said it remained confident of a positive trading outcome, as it looks to benefit from more store openings and a continued focus on costs.

In the year to January 29, Ottakar's saw sales rise by 12.7 per cent to £173.2m, with trading ahead by 3.5 per cent.

Margins improved for a fifth year in succession after it brought the product mix of 24 Hammicks stores, acquired in 2003, more into line with the rest of the estate.

The group had 131 outlets at the end of January, including stores in Northallerton, Darlington, Sunderland and Harrogate, North Yorkshire.

It plans to open between ten and 15 shops this year, with most expected to be smaller stores.

Shares, which fell 13 per cent following January's profits warning, stuck close to their opening mark, at 263p, following yesterday's results.

Paul Smiddy, an analyst at broker Baird, said: "The book market remains in reasonable health and there is the Harry Potter launch in July.

"But, overall, there is nothing in these results to stimulate an immediate renaissance in the share price.