Inspite of a four percent drop in its annual profit, Premier Investments Limited (ASX: PMV) expects improvement in the retail environment.

In fact, the fashion group is still in search of assets to buy. Premier chairman Solomon Lew said the group had analyzed a number of acquisition opportunities.

Lew disclosed that the company was interested in fashion chain Country Road if majority owner South African retailer Woolworths Holdings would sell its shares. The chairman holds only 11.8 percent of the chain.

Premier posted $316.6 million in cash on hand and $110 million in debt at the end of the 2009 – 2010 financial year. The company declared a final dividend of 18 cents per share and a special dividend of 10 cents per share funded by the tax windfall payment.

Lew holds a 41.8 percent stake in the parent company of retailer The Just Group. He predicts a $100 million to $110 million earnings before interest, tax, depreciation, and amortization this year for The Just. The forecast figure is far higher than the 2009 – 2010 earnings of $84.3 million.

The optimism remains even with the The Just's 11.4 percent drop in profits to $76.3 million after tax and even the $18.5 million loss at the Portman's womens wear chain.

Lew described the performance of his retail stores as “very credible... in a challenging retail environment.”The chair explained, “Consumer sentiment in 2010 was fragile, and this was reflected in sluggish retail sales across the board.”