The Queen's corsetier hits hard times as bra wars intensify

Rigby & Peller, the corsetier to the Queen and many Hollywood A-listers, may offer bras up to a formidable size M cup. Where profits are concerned, however, it is not so well-endowed: according to its latest annual accounts, the company made a loss of £214,000 last year, compared with a pre-tax profit of £168,000 the year before.

Gwyneth Paltrow, Lady Gaga and Scarlett Johansson are just three of the stars that have benefited from the highly specialised service that Rigby & Peller has offered for almost 30 years. But as any glamour model who has undergone bust-enhancement surgery will tell you, ill-timed expansion can cause problems. Rigby & Peller used to occupy only exclusive London outlets in Knightsbridge and Conduit Street; today, it has stores in Bluewater, Westfield, Chelsea's King's Road, and in Essex and Cambridge.

The range of its stock has also expanded and this has happened at a time of intensifying competition: a consumer looking for a budget purchase may now pick up a bra at any high-street chain for £10. Department stores too offer a huge range of merchandise, as do upmarket retailers such as Myla and La Perla.

Even Rigby & Peller's long-renowned bra-fitting "rite of passage" is no longer unique: a similar service is on offer at Marks & Spencer and most leading department stores.

The company was bought by June Kenton in 1982 for the not-so-princely sum of £20,000. Mrs Kenton – who handed over to her son the day-to-day running of the business earlier this year – still visits the Palace to fit the royals for made-to-measure underwear (any sizing remains one of the world's best-kept secrets).

Her staff are well-versed in catering to the idiosyncratic requirements of anyone from the well-heeled bride looking for something to nip-and-tuck her in all the right places on her wedding day, to the WAG in search of an entirely backless bra to wear beneath a barely-there grand-entrance outfit.

So with this pedigree, why has Rigby & Peller suffered in the past year? Very broadly, lingerie retailers divide their product into two categories: basic and fashion-led. "What we noticed a year to 18 months ago was that people had stopped buying basic product in favour of investing in more special pieces," said Helen Atwood, lingerie buyer at Selfridges.

Women had less money to spend going out so they were buying more glamorous underwear, presumably in a bid to make life more interesting at home. Now, according to Ms Atwood at least, standard underwear is in demand once more. "We're seeing renewed interest in basic lingerie again but it's all about good-quality product," she said. "People are more willing to spend money on a good bra that fits them properly than they used to be."

On paper, that should mean that Rigby & Peller is in its element. But it is far more difficult for an independently owned retailer – that remains small by comparison with rivals – to keep up with the times than it is for the world's better-known and ubiquitous names.