The Iraq war and Sars sent profits tumbling at upmarket department store group Harvey Nichols last year. The company is to be the anchor tenant at the new €650 million Dundrum Shopping centre in Dublin and has pledged to create 200 jobs.

Harvey Nichols, which has its flagship store in London's Knightsbridge and others in Manchester, Edinburgh, Birmingham and Leeds, said trading was tough in 2003 and 2004 due to the conflict in the Middle East and the outbreak of the virus in Asia.

Pre-tax profits in the 53 weeks to April 3rd, 2004, more than halved to about £2.4 million (€3.8 million) from £5 million the year before, despite a slight increase in turnover to £76.1 million from £74.2 million previously, according to annual accounts filed with Companies House.

The firm said it had decided not to issue a dividend in 2004 after paying its shareholders 28.2p per share the previous year.

A company spokeswoman declined to comment on the figures. But in an accounts statement, Harvey Nichols' directors said: "The company faced challenging trading conditions during the period due to the impact of the war in Iraq and Sars.

"Barring any unforeseen circumstances, the directors expect market conditions to gradually improve in the coming year."

Entrepreneur Dickson Poon has pursued an international expansion strategy for Harvey Nichols since his Hong Kong-based company, Dickson Concepts (International), bought the group in 1991 and took it private in January 2003.

Benjamin Harvey set up Harvey Nichols in 1813 in Knightsbridge and the existing store was opened in the 1880s, with its rear section added in 1932. In 1919 Debenhams bought the company and it became part of the Burton Group in 1985.

Harvey Nichols Group was listed on the London Stock Exchange (LSE) in April 1996. It went on to launch the Oxo Tower Restaurant, Bar and Brasserie on London's South Bank and the Prism Restaurant and Bar in the City of London. It delisted from the LSE in January 2003.