Paul Smith looks sharp as profits rise 18 per cent to £21m

The upmarket fashion retailer Paul Smith said it defied the economic downturn to deliver a sharp rise in annual profits, driven by a strong performance in Britain and overseas. The company, founded by the legendary Nottingham-born designer Sir Paul Smith, also increased its turnover, despite wholesale orders slipping.

In the year to 30 June, pre-tax profits rose 18 per cent to £20.9m. Paul Smith described the performance as "very pleasing given the challenging economic climate". Total sales inched up by 2 per cent to £152.83m during the period.

The company, which has 15 UK shops and concessions in department stores, said: "[We] continued to grow total sales, with a reduction in wholesale orders being more than offset by increased retail sales resulting from new shops, as well as increased like-for-like sales in existing shops and the internet. Despite a difficult Japanese market, royalty sales have remained strong."

Sir Paul, who opened his first shop in Nottingham in 1970, sold a 40 per cent stake in the company to a Japanese licensee, Itochu, in 2006 but retained control. There are more than 200 Paul Smith shops in Japan and others in Paris, Milan, New York and Hong Kong.

Sir Paul was knighted in 2000 and remains both the company's designer and chairman. Sir Paul and Lady Smith have an estimated personal fortune of £230m.