Fashion retailer Country Road is expecting the challenging first quarter trading conditions to continue right through Christmas before improvements will be seen in early 2011.

At its annual shareholders meeting, Country Road chairman Simon Susman said Australia’s retail sales were down by 4.7 per cent and concessions sales down 7.6 per cent for the first quarter of 2010-11.

But this decline was offset by the South African business which continued the expansion of the Country Road and Trenery brands taking its total store operations to 20.

Since the end of the 2009-10 financial year the company has also opened three new Trenery stores and one further Country Road store in Australia with more plans to open four Country Road and three Trenery stores in the coming year.

Country Road also saw the launch of its online store in August 2010.

“We are excited to embark on this e-commerce journey and are pleased to provide our customers with the opportunity to purchase Country Road and Trenery merchandise from anywhere in Australia and New Zealand,” Susman said.

But despite tough trading environment, Country Road continued to expand delivering a solid growth of sales.

Total sales for the year increased 8.5 per cent to $372.1 million on the prior year while total revenue for the year was up 9.7 per cent to $381 million. This result was driven by sales growth in 8.7 per cent of its retail stores.

“We will continue to focus on opportunities for the rollout of Trenery and the ongoing expansion of Country Road. Whilst we are excited about these expansion plans for both brands, we are mindful of the persisting difficult conditions in the retail sector in Australia and will be prudent in our working capital management,” Susman said.