Fashion retailer East back in the black thanks to better sales and cost cutting

East, the bohemian fashion retailer in which former Channel 4 chairman Luke Johnson has a stake, has moved back into the black due to improved sales and cost cutting.

Of East's 77 stores, 27 are concessions in department stores such as John Lewis and Fenwicks Photo: Alamy

The chain, which has 77 stores, made pre-tax profit of £2.1m over the year to January 31, compared with a loss of £1.7m the year before. Sales rose 12pc to £37m, according to accounts just filed at Companies House.

The retailer said: "The directors are very pleased to report a successful year for East in a very challenging economic environment. The year saw a return to profitable trading through both sales and margin growth along with cost and efficiency improvements."

East was founded on Fulham Road, London, in 1994 by former Monsoon staff Clive Pettigrew, Penny Oliver and Jonathan Keating. The retailer sells female fashion based on colourful block prints found in Jaipur, India.

Of its 77 stores, 27 are concessions in department stores such as John Lewis and Fenwicks. Over 2009, East also opened four stores in India through a franchise agreement with Fabindia, an apparel and home furnishings company that bought a 25pc stake in the retailer in 2009. It is understood that Fabindia has an option to acquire the remaining stake within three years of its initial purchase, although the terms of the deal remain private.

When the first Indian store opened, Mr Pettigrew, East's chairman, said: "East cannot afford to be left out of the growing market in India. For India, we have cut the price of our merchandise by nearly 40-50pc to be competitive in the local market. The target consumers for our products will be women who are looking at western and fusion wear."

In 2006 a consortium including Risk Capital Partners, the investment vehicle of Pizza Express and Channel 4 entrepreneur Mr Johnson, bought a 50pc stake in the company. It is not clear what size Risk Capital's stake currently is due to the Fabindia investment.

Over the year to the end of January, East opened concessions in four John Lewis stores, in Kingston, Cardiff, Leicester and Sheffield, and two Fenwicks outlets, in York and Colchester. Since then, it has also opened in John Lewis Norwich, Browns of Beverley and a store in the Sanderson Arcade in Morpeth, Northumberland.