Paul Smith defies gloomy trend as profits leap 36 per cent

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.