Net profit at Swiss clothing group Charles Voegele Holding AG plunged by 80 million francs to just 1 million francs in 2001 as expansion costs, weak consumer sentiment and inventory writedowns took their toll. The results were expected after a profit warning was issued last year.

The company said it would not pay a dividend.

Earnings before interest, tax, depreciation and amortisation fell to 127 million francs from 206 million. But gross sales rose 16 per cent to 1.86 billion francs and the number of stores it operates across Europe grew by 168 to 744, due in part to acquisitions, it said in a statement.

Voegele said it expects net and operating profit to "grow substantially" in 2002 on the back of a new strategy, which is expected to improve inventory management, among other things.

The company said: "The growth rate in 2002 will be reduced in favour of a consolidation of the existing store network and the selective development of new locations." By the end of the year the number of stores will have grown by around 50 to some 800.

In 2001, the company opened 65 new stores in its main markets of Switzerland, Germany and Austria. The group also acquired Dutch Kien Group, leading to more than 100 shop openings in the Netherlands and Belgium.