Specialty Fashion Group also revealed a first-half profit drop of 64 per cent, with tough economic conditions offering no reason to expect improvement in the second half.

Net profit after tax was $6.15 million in the half year to December 31, down 64.1 per cent from $17.15 million in the prior corresponding period.

Revenue was $307.28 million, down 0.5 per cent from $308.81 million in the previous corresponding period, the company said in a statement today.

Earnings per share were 3.2 cents, down 63.6 per cent from 8.8 cents in the same time the previous year.

The company did not declare an interim dividend.

Specialty has closed seven stores since January this year and it plans to close another 15 stores in the second half of fiscal 2012.

In its half-year review, the company said it expected to close up to 120 stores in the next three years.

In a statement, Specialty Fashion said it was experiencing the "toughest retail environment thus far".

"We remain committed to our strategy of recalibrating the group of businesses through discipline, innovation and expansion into sales channels in order to maintain the financial health of the company in the short term and ensure we are well set for long-term growth," chief executive Gary Perlstein said in a statement.