River Island grew its sales nearly 8% last year, but profits fell as the company invested in the business, and trading conditions so far this year have proved challenging.

In the year to December 26, 2009 sales grew 7.9% to £826.4m but profits fell 14% to £138.6m as the company invested in its website, a new distribution centre, refurbishment of its west London head office and international expansion.

But this year River Island, like many fashion retailers, experienced strong fluctuations in trade between the best weeks and weaker ones.

The company has continued its international expansion, opening its first Belgian store in Antwerp two weeks ago and opening stores in Poland and Russia. Closer to home, last week it opened its only department store concession within the new Shoe Galleries at Selfridges. The concession is a one-off and not expected to be a precursor to other such arrangements.

Chief executive Ben Lewis said 2009 had been a difficult year for fashion and described River Island’s showing as a “solid sales and robust profit performance against this backdrop”.

He added that cost pressures of the weakness of the pound and the rising price of cotton would affect the market and said he would “continue to manage the business tightly, in the light of global cost pressures and the subdued consumer environment”.

The company is countering the pricing challenges by adding more design detail into some garments to justify slightly higher price points where appropriate.

Its new distribution centre is due to open next month and will consolidate all the company’s distribution activities into one site in Milton Keynes, offering double the capacity of its existing warehouse. The company expects the new centre to be at optimum utilisation within two or three years.