FASHION retail giant New Look - a south coast success story - is the latest company to record a dip in seasonal sales.

The chain store, which has local branches across Southampton and in Eastleigh, Romsey and Winchester, said the drop reflected a decision to minimise discounts to customers.

Analysts now believe New Look founder Tom Singh may cut his offer for the retail chain after the 5.1 per cent fall in like-for-like sales over Christmas.

Former owner Mr Singh, who founded the Dorset-based company in 1969, made an indicative offer of 348p per share in October in a bid to take the group private again.

His bid - backed by venture capital partners - valued the group at about £700m but since then its share price has fallen to 312.25p. New Look yesterday said its strategic overhaul remained on track, and it hoped to conclude discussions with Mr Singh "within the next couple of weeks".

New Look, based in Weymouth, said the stance over discounting enabled the group to maintain profitability over the festive period amid difficult trading conditions felt across the retail sector.

Chief executive Stephen Sunnucks said: "Footfall was down as a whole for December and our view was that discounting would not have improved this figure as the customers simply were not there."

Christmas trading was "satisfactory" and the strategy of focusing on larger stores remained on track. Analysts expect the group to post pre-tax profits for the year to March 27 of £89 million.