DISCOUNT retailer TJ Hughes is to open ten new stores, including a branch on Tyneside, part-funded by a share issue which will raise nearly £10m.

TJ Hughes will also expand its Liverpool distribution centre as it prepares to take its number of outlets to 40.

The move will create 500 jobs, taking the group's total workforce to 3,000.

New stores include the conversion of three former C&A branches at Glasgow, Romford and Hull. Further sites have been earmarked at Newcastle, Kettering, Southend, Scunthorpe and Redditch.

The expansion programme has been fuelled by figures showing that like-for-like sales were up 5.5 per cent in the 14 weeks since the end of July.

All store sales during the same period were up 25 per cent despite the impact of fuel shortages, flooding and unseasonal weather conditions.

David Winterbottom, chairman, said: "Value-for-money retailing continues to be one of the most vibrant parts of the retail sector.

"TJ Hughes' organic expansion programme confirms its position as one of the leaders in this part of the sector."

The store openings, which will cost more than £20m, will increase the company's floor space by 47 per cent to 1.4 million sq ft in 2002.

A share offer is expected to raise £9.74m towards the expansion programme, which will begin in the spring.

A £3.4m scheme to upgrade the retailer's distribution centre in Liverpool is set to begin in the spring