JOHANNESBURG, Sept 9 (Reuters) - South African retailer Foschini Ltd (FOSJ.J) said on Wednesday 9 September sales for the first five months of the fiscal year rose more than 8 percent in an "extremely tough" trading environment.

Photo: www.foschini.co.za

The company, which operates 1,200 fashion, jewellery and cosmetics stores in South African, said it would increase trading space by between 9-10 percent in the year to March 2010.

"We will continue to open new stores in certain of our formats that are under-represented," the company said in a statement.

Foschini, which competes with Truworths, Woolworths and unlisted Edcon, boosted five months sales by 8.3 percent but said trading remained volatile and extremely tough.

Shares in the company rose 1.61 percent to 59.34 rand, outpacing a 0.63 percent gain in the JSE Mid-cap index.

"Our expectation is that the economy will start improving but only from the last quarter of our financial year, as lower interest rates begin to assist consumers," the group said.

After years of bumper growth fuelled by a fast-growing black middle class, South African retailers have struggled to keep sales and profit rising faster than inflation as the country's first recession in 17 years dampens consumer spending.

South Africa's retail sales fell by 6.7 percent year-on-year in June, showing demand remains depressed by a recession that has resulted in job losses across Africa's biggest economy. (Reporting by Tiisetso Motsoeneng)