Operating profits at luxury brand group Marchpole slid to £1.2 million in the six months to September 30, from £5 million the previous year.

Turnover was also down, from£38.6 million to£29.9 million for the period. Pre-tax profits plummeted to£500,000 from£4 million.

The retailer, which owns brands including Emanuel Ungaro, Ungaro Homme and Jean-Charles de Castelbajac, hopes expansion into Eastern Europe will strengthen its balance sheet next year.

Marchpole executive deputy chairman Michael Morris said: “This has been a period of transition for the company as we expand into the highly lucrative Russian, Eastern European and Far East markets. The company is no longer reliant on a single brand. Many of our labels are still in relative infancy.”

Marchpole ended its long-standing licence agreement with YSL at the end of last year. Since then, it has brought new brands on board, most recently maternity label Homebody and footwear brand Greenmark.

Next year, Marchpole plans to open four flagship Emanuel Ungaro stores in Eastern Europe.

The retailer also said that it would be looking at further acquisition opportunities to strengthen its portfolio and broaden distribution channels.