RICHARD Branson's clothing and perfume company, Victory Corporation, plunged further into losses over the last half year.

Virgin Vie, the cosmetics arm of the group which has its factory and headquarters at Tangmere, near Chichester, saw strong growth in its direct sales operation, the company said.

But, from early October to January 2, sales from Virgin Vie shops fell 8 per cent on a like-for-like basis excluding new store space.

Victory, which spent £4 million launching its designer clothing label last year, said it racked up pre-tax losses of £10.9 million in the six months to September 30, up from £3.5 million.

The group said the deficit was largely expected but warned that sales in the next three months could still be damaged by the difficult high street trading conditions.

Turnover came in at £3.9 million, with no comparable figure for the same period the previous year.

But the company said this had improved since stores were revamped in November.

Stephen Murphy, chairman of Victory, said: "Both businesses have had an active first half in an exceptionally tough trading environment."

There will be no dividend for investors.

Virgin Vie employs a workforce of around 100 people at its 10.000sq ft West Sussex site which is not far from the West Wittering home of tycoon Branson's parents, Ted and Eva Branson.

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