FASHION chain New Look, which has headquarters in Weymouth, saw profits dive in an “extremely challenging” market and has warned of more pain ahead.

Pre-tax profit slumped 37.6 per cent to £30.1million in the three months to Christmas Eve, with UK like-for-like sales falling 4.7 per cent.

Chief executive Anders Kristiansen said: "The UK market has continued to be extremely challenging, with reduced footfall and a highly promotional environment on the high street, resulting in a disappointing like-for-like sales performance.

"Despite this, total sales for the quarter were level as a result of good performances outside the UK, online and in menswear, proving that our strategy of diversification is the right one for our business.

"It remains key to our growth to continue to diversify our offer and to invest in our priority international markets."

The group said it expects the challenging conditions to persist into 2018.

New Look has headquarters in Weymouth but was bought by the South African investment group Brait last year. It has stores across Dorset.

It said total sales edged up 0.8 per cent in the period to £422.6 million.The company added that in China, where it has surpassed the milestone of 100 stores, it recorded positive like-for-like sales.