Paul Smith defies gloomy trend as profits leap 36 per cent

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The Independent Online

Paul Smith shrugged off the downturn in the UK and the Japanese tsunami to increase its profits by more than a third in the past year.

But the fashion company, founded by the designer Sir Paul Smith in 1970, scaled back its dividend payment to just £309,000 in the year to 30 June. This followed a bumper £3.45m payout in 2010.

Its more conservative dividend reflected increased capital expenditure, including on new stores worldwide as well as on distribution and IT in Nottingham.

Paul Smith's pre-tax profits rose by 36 per cent to £34.1m in the year to June on turnover up 12 per cent at £196m.

The company – which has 21 standalone UK shops and 132 overseas – boasted its wholesale business had "surpassed order levels achieved before the downturn". It even grew its Japanese licensing income by 5 per cent, despite a "very difficult" year with the tsunami in March.

Sir Paul sold a 40 per cent stake to a Japanese licensee, Itochu, in 2006 but retained control.

He also remains its designer and chairman and was knighted in 2000. He and his wife are worth an estimated £260m.