Ryohin Keikaku Co expects consolidated operating profit to fall 15 per cent to 11.4bn yen ($96.77m) in the year through February, and net profit to drop 12 per cent to 5.2bn yen, the first profit decline since the company was established in 1989, the retailer said Thursday.

Although the company last September projected a 20 per cent rise in group operating profit and a 37 per cent rise in net profit for the year, sales at existing stores have continued to decline about 11 per cent year on year since autumn, partly due to stagnant demand for clothing.

While the gross profit margin is expected to shrink due to lower prices, the ratio of marketing and administrative costs to sales is forecast to rise.

For the first three quarters (March-November), the company posted a group operating profit of 10.1bn yen and a net profit of 4.9bn yen.