The owner of brands such as Smiggle, Portmans and Just Jeans has taken a steep tumble as it announced its 2011 full year profit of $40.5 million, which is 49 per cent lower than the previous year.

Meanwhile, its underlying profit before tax for the 52 weeks ended 30 July 2011 was $73.3 million, in line with recent guidance with underlying profit after tax was $51.5 million.

Premier said the results reflect the challenging retail environment, characterised by very low levels of consumer confidence, weak clothing and apparel sales, consequent extensive industry discounting and the natural disasters in Queensland, Victoria and New Zealand.

Within that environment, Jay Jays and Dotti were most affected. Encouragingly, the Portmans turnaround has progressed well. Peter Alexander and Smiggle delivered the strongest performance of the group’s brands and Premier will continue to invest in their growth.

"The Macro economic environment and consumer confidence has continued to deteriorate in August. As a result, trading for the first six weeks of the season has been very challenging,” CEO Premier Retail, Mark McInnes , said.

Despite this, moving forward, the company will look towards the continual implementation of its strategic six point plan that includes focussing on better sourcing, reduced inventory levels and mark-downs; expanding its internet business; growing its Peter Alexander and Smiggle brands significantly.

"The implementation of the six point plan is on track to deliver the forecast benefits under a strengthened and re-invigorated senior management team,” McInnes said.”

“We are focussed on the reinvigoration of our product and brands and improving gross margin through better sourcing.

“Given the macro environment we have reacted quickly with an accelerated cost reduction program. Our inventory is clean in all brands, and all our new Peter Alexander and Smiggle stores are on track to open pre Christmas.”

Premier has reaffirmed its guidance that the earnings before interest and tax (EBIT) in 2012 will be in the range of $80 million and $95 million, given the successful implementation to date of the strategic initiatives, and subject to the macro environment stabilising and Christmas trading.