Trading Statement

Retail Stores PLC
10 January 2005


FOR IMMEDIATE RELEASE
10th January 2005


                               RETAIL STORES PLC:

            LIBERTY BUCKS RETAIL TRENDS AS CHRISTMAS SALES SURGE 14%


Retail Stores plc ('Retail Stores') owner of the Liberty store on London's
Regent Street, today announces that retail sales for December up until Christmas
showed a 14.2% advance over the comparable period a year ago.

While in the first full week of the post Christmas sale, volume was also up by
more than 5%.

This surge in December sales reflects Liberty's increasing popularity as a
destination shopping venue following the restructuring both of the retail offer
and management team over the past year. Importantly volumes were not boosted by
aggressive discounting or pre-Christmas sales.

At the heart of the improved sales performance during December were four key
areas: Beauty and Cosmetics; Ladies Accessories; Jewellery and Menswear. There
was also a strong performance from the re-vamped Home department.

The December results follow a strong performance in the Autumn/Winter season
where retail sales at the store for the 26 weeks to the 25th of December were
ahead of the previous year by 10%. This result was achieved without the need for
substantial markdowns and the gross margin rate over this period also improved
by more than 1% point. Stock levels in the key fashion areas following the first
week of sale were in line with expectations

Liberty's average transaction values increased by 13% over the previous year and
conversion rates have been improving steadily since the beginning of September.

Iain Renwick, Chief Executive, said: 'December's performance has been most
encouraging in view of the generally difficult retailing environment.. Over the
past six months we have seen steadily increasing sales volumes as the hard work
behind the scenes to reposition Liberty as London's destination store has borne
fruit.

'We are also making tremendous progress in increasing the level of Liberty
own-brand goods in the store and the success of Liberty branded giftware over
the Christmas period reflects that. Without a doubt we are turning Liberty
around,' added Renwick.

Liberty Chairman Richard Balfour-Lynn, who is also Chief Executive of Marylebone
Warwick Balfour Group PLC, which owns 68% of Retail Stores plc, Liberty's
ultimate owner, today also announced that one of the principal goals this year
is to eliminate the company's £50m bank debt. He said this would be achieved
through the sale of Lasenby House and the sale and leaseback of Regent House.
DTZ has been appointed to advise on the property disposals.

Richard Balfour-Lynn commented: 'We hope that during the first half of 2005 that
these sales will be completed, leaving Liberty debt-free. Together with the work
that has been undertaken, and continues to be undertaken, to reinvigorate the
Liberty brand the emporium is becoming one of London's most exciting and
rewarding places to shop.'

Finally, Retail Stores announces that it has appointed Seymour Pierce as its
Nominated Advisor and Broker.


                                     Ends.

Contact:

     Richard Balfour-Lynn, Chairman, Liberty.            Tel: [phone]
     Iain Renwick, Chief Executive, Liberty.             Tel: [phone]
     Baron Phillips, Baron Phillips Associates.          Tel: [phone]


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