Sir Paul Smith warns of tough times in high fashion

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The tailor, known for his sharp suits, attention to detail and love of stripes, said conditions had deteriorated during the past six months and that the retail environment would be "challenging" during the next six across all global markets.

In accounts just filed, Paul Smith Group Holdings admitted that a drop in orders from the brand's stockists would eat into profits and sales for the 12 months to the end of June.

Until halfway through last year, Sir Paul's style empire, which sells everything from men's and women's clothes to perfume, mugs and stationery, appeared to have weathered the recession well. Profits before tax slipped only two per cent to £21.7 million in the year to June, on the back of sales up 12 per cent at £168.4 million.

Sales in Britain rose by seven per cent to £59.6 million, while sales in the rest of Europe were up by a quarter to £54.9 million. Sales outside Europe climbed eight per cent to £53.8 million. But in Japan, where Sir Paul's label has almost cult status, the company admits business has been "difficult".

The recession has not halted the brand's steady expansion, with the opening of another London store in Marylebone High Street in October and one in Las Vegas last month.

The designer's finances still look peachy too. The highest-paid director of Paul Smith Ltd, presumably Sir Paul, received a small pay rise last year, pocketing £4 million. The company also paid out dividends of £1 million last year, most of which is likely to have also gone to Sir Paul, as founder, who retains a 60 per cent stake.

His stake is estimated to be worth £150 million. The 63-year-old and his wife, Lady Smith, are 243rd on the Sunday Times Rich List with a fortune estimated at £230 million.

Sir Paul has resisted the idea of floating the business, but sold a 40 per cent stake to Japanese licensee Itochu in 2006.

Dapper-dressing fans of Sir Paul's suits include rock stars Sir Mick Jagger, David Bowie and Kaiser Chiefs as well as Bank of England governor Mervyn King.