The new year bargains: your guide to the best the stores have to offer

There is nothing quite so rewarding as turning up to a New Year's Eve party, or any party for that matter, and being admired for an outfit that cost £20 instead of £200. "What, this old thing? I picked it up for next to nothing in the sale, darling." It is not only fashionable but sensible to sniff out bargains that cost a fifth of their original price and wear them with pride.

There is nothing quite so rewarding as turning up to a New Year's Eve party, or any party for that matter, and being admired for an outfit that cost £20 instead of £200. "What, this old thing? I picked it up for next to nothing in the sale, darling." It is not only fashionable but sensible to sniff out bargains that cost a fifth of their original price and wear them with pride.

Should you be dashing out today for last-minute Christmas presents, it could be well worth battling with the hordes at House of Fraser for its pre-Christmas womenswear sale, with up to 40 per cent off designers such as Calvin Klein, DKNY and Philosophy di Alberta Ferretti. This is in addition to its main January sale.

The Whistles' sale, always good for spangly party wear, has been running for a week, with 50 per cent off; and Russell & Bromley and Ravel have already halved their prices.

Most retailers are holding out to 27 December to start sales. Time enough to plan your assault and think about what it is you really need. After all, bargain hunting does have its drawbacks, as most people's wardrobes will testify. Don't be tempted to squeeze your feet into the latest "must-have" shoes just because they are £50 cheaper or to convince yourself that those orange pantaloons will be a resounding success on the beach next summer. The trick is to buy only things you would have paid full price for. Invest in well-cut classics rather than the season's most obvious fashion pieces.

Fenwick is offering some great bargains: wool/cashmere coats with fake-fur collars, by Nicole Farhi, down from £499 to £249; Sportmax black wool beaded coats, £529 to £265; and Armani silk/satin long sleeve tops, £175 to £85. Selfridges promises reductions of up to 50 per cent on both its menswear and womenswear collections in London and Manchester. Men can snap up a Paul Smith or Kenzo suit, a Burberry or Christian Dior tie, and jeans by Armani and Ralph Lauren. For women, the casualwear, designer and underwear departments look promising, with reductions everywhere.

If you seek the labels of the moment, Harvey Nichols stores in Knightsbridge and Leeds will be offering 50 per cent off fashion's current luminaries, including Marc Jacobs, Alexander McQueen, Dries Van Noten, Markus Lupfer and Chloe. It also has some of the season's most sought-after accessories: two-tone kitten-heel mules by Bottega Veneta, £112; quirky leather bags by Miu Miu, £120; and the bag du jour, the Fendi Baguette, down from £1,495 to a reasonable £1,120.

If your budget won't stretch to designer items, there is always the high street. Karen Millen is best - or at least the most audacious - at spinning off the more flamboyant catwalk looks. This is the place to shop if you have always lusted after Versace and Dolce & Gabbana. Millen's black leather halter-neck dresses could be yours for just £195, as could a gold sequinned dress - ideal for New Year's Eve - for £64.95.

For more sparkle than your average Christmas tree, Warehouse reports that its best buys will include lots of gold-sequinned skirts and bustiers, from £20.

The high street chains will also serve up safer classics. Press & Bastyan has simple black pinstripe single-breasted jackets for £140, and trousers at only £75.

Oasis has some of the best knitwear, from £25, and glazed leather jackets in camel, red and black, which are down from £170 to £70.

Not even the total breakdown of public transport will keep the crowds from Knightsbridge on 3 January. Harrods, home to the most famous sale of all, will be opening its doors at 9am. The vast women's fashion floor is one of the best in the country, holding more designer labels than any other, among them Donna Karan, Fendi, Gucci, Helmut Lang, Hussein Chalayan, Marni, Ralph Lauren, Max Mara, Paul Smith, D&G, Versace and Herve Leger. Expect between 40 and 50 per cent off most items.

Rococo marble fireplaces get some shoppers biting at the bit

If it's any consolation, trends in interiors change more slowly than those in fashion, so many of last year's must-haves will remain desirable in 2001, whether it's chocolate-brown leather beanbags or minimalist Scandinavian tableware.

Alma Home, revered maker of chic leather homewares, is one brand whose products are bound to stand the test of time. They're widely available: beanbags, cubes and coasters can be snapped up at House of Fraser stores nationwide (from 27 December) and selected Debenhams. The best bargains are to be found at Alma Home's East London showroom (from 2 January), with prices down by as much as 70 per cent.

Last year Marks & Spencer brought out one one of the cheapest and most chic leather cubes in Britain, so M&S sales (up to 50 per cent off selected items) are worth checking out. Five stores, in Edinburgh, Aberdeen, Glasgow and Camberley, will open their doors for sale shoppers on Boxing Day, the rest on 27 December.

Sales at Selfridges in London (from 26 December) and Manchester (27th) are also not to be missed, given how impressively they've brushed up their act on the interiors front in the past year. Soft furnishings will be reduced by up to 50 per cent, an Arthur Price 60-piece cutlery canteen by 40 per cent. The impressively stocked Cookshop is offering large discounts, too.

From 27 December, Liberty is offering stupendous bargains on designer homewares and classic bed linen. Its 10.5g goosedown double duvet has been knocked down from £259 to £129, its glamorous three-seater "Florence" sofa by 40 per cent, its gold leaf-framed mirrors by 50 per cent, and prices of top quality cookware have been cut by 40 per cent.

Continuing the kitchen theme, from 27 December John Lewis of Hungerford is dramatically discounting its Artisan furniture: a trendy two-drawer worktable with maple top, once £895, will be down to £745. The fashionable London tableware store Vessel, meanwhile, is holding a "Setting up a Home" sale, covering "all basic items that no new (or revamped) home should be without" (from 3 January).

London's cult cookware shop Divertimenti is offering a 40 per cent cut on selected items - a casserole dish, for example, will come down from £79 to £47 - while the York department store Mulberry Hall is offering heavily discounted kitchen gadgets by Alessi, Cusinox, and Villeroy & Boch.

If you want to escape the kitchen, with its atmosphere of toil, there are bargains to be found in luxury bed linen, rococo fireplaces and cutting-edge furniture. London boutique Couverture stocks exquisitely luxurious hippy-chic bed linen, throws and cushions. The sale, starting on 30 December, includes a sage-green silk bed throw with shawl-style fringeing and a handstitched leaf design, reduced by 50 per cent.

Designers Guild's London store and warehouse are holding sales (up to 50 per cent off bed linen and cushions at the former; 20 to 50 per cent off fabrics and wallpapapers at the latter).

With today's gradual rehabilitation of rococo (after a decade-long stranglehold of minimalism), ornate fireplaces are back. From 27 December, London's Chesney's Antiques Fireplace Warehouse is offering 20 per cent off. Better still, Renaissance London's opulent marble fireplaces have been reduced from £3,000 to £2,400.

If you prefer the enduringly chic look of contemporary, pared-down furniture, try London's SCP store, which has been a breeding ground for cutting-edge design. From 27 December, you can pick up ex-display furniture by the likes of Terence Woodgate and Matthew Hilton at massive discounts. Ditto Heals (branches in London, Guildford and Kingston): before 27 December, its solid oak 8ft by 3ft Boston dining-table would have set you back £3,025; soon it will cost £2,720. Quite a buy, but its simple elegance will ensure it survives changing trends.