LONDON, Oct 11, 2001/ --- The UK's Great Universal Stores (GUS) is determined to move forward with its planned floatation of luxury brand Burberry, despite its admission that sales have been affected by the terror attacks.

GUS announced its strategy last December, suggesting that it would float up to 25 percent of Burberry on the London Stock Exchange. Market conditions permitting, GUS says it still intends to float shares in June 2002. The announcement comes after a sharp drop in GUS's shares on the London exchange just a few weeks ago and much speculation that Burberry was becoming more of a ' hindrance than a help to the retail group.

Burberry, renowned for its signature red, beige, black and white checked products, enjoyed an underlying sales rise of 31 percent in the first half. Sales at the brand's retail outlets, however, dropped 15 percent in the two weeks following the September 11 attacks.

"Although the decline in travel and tourism is impacting the luxury sector as a whole, we expect domestic demand in Japan and Spain, which together account for two-thirds of Burberry's worldwide sales at retail value, to be less affected," said John Peace, group chief executive.

Burberry Finance Director David Tyler said the company still expects to increase earnings this year. "We can provide a certain amount of reassurance that, although inevitably our business has been affected since September 11, the overall group impact is relatively modest," he said.