Kiely Rowan, the company behind the colourful Orla Kiely fashion and lifestyle brand, has revealed a 16% rise in profits despite lower sales.

Operating profit at the company, whose fans include Alexa Chung, Keira Knightley and Lena Dunham, rose to £314,339 in the year to March. Sales slipped 10% to £9.1m as the company said it had moved away from discounting and focused on growing its retail and online businesses. The company, which also owns the Olive & Orange brand, has two shops in London and one in New York and sells products in thousands of other stores including John Lewis in the UK and Target in the US. Originally from Ireland, Kiely began designing hats before moving on to handbags and other accessories.

Dermott Rowan, chief executive of Kiely Rowan and the designer’s husband, said: “The business today is something really special – sustainable and profitable, with well-managed product lines. The brands have an exciting future.”

In accounts filed at Companies House, Kiely Rowan said it would continue to expand in the US, Asia and Australia and seek out new markets.