THE Irish operation of Aurora, the company behind the Karen Millen fashion label, narrowed its losses in its last financial year.

The company, which also owns Coast, Warehouse and Oasis, made a pre-tax loss of €20.3m in the 12 months to the end of January 2010.

That compares to a loss a year earlier of €124m when the company wrote down the value of good will associated with its UK operations, the company said.

The loss in the year end 2010 also included further good will write-downs.

At operating level, which excludes the impact of exceptional charges, the company posted an operating loss of €2.5m compared with a year-earlier operating profit of €9.5m.

Aurora said sales for the 12-month period dropped by 30% to €51m.

Aurora Ireland chairman Ian Galvin said 2009 saw the worst of the slump and that sales have shown signs of stabilising up in the last few months.

He said Aurora, which has 83 shops overall in Ireland, had invested over €1m in revamping some of its shops and that more are in line for an upgrade in the coming months.

"It's a difficult environment but customers are still willing to spend money on something nice to wear. They are looking for value and quality and we've had to respond to that.

"What we've found is people are buying less frequently and the trend is to go for dark colours they can get plenty of use of," Galvin said in an interview.

Aurora Fashions, its British parent company, said like-for-like sales across the group rose 5% in the six months to the end of July.

It didn't give a breakdown of its Irish shops for that period.

The Irish shops may break even in the current financial year, which ends in January 2011, Galvin said.