The holding company for Mr Richard Branson's cosmetics and clothing business has issued a profit warning days before launching the first Virgin fashion range. Victory Corporation, which is launching its upmarket Virgin clothing collection on Thursday, said tough retail conditions and a strategic rethink would make losses "significantly" worse than expected.

Shares fell by nearly 50 per cent to 10 1/2p after the statement, which added that founding chairman Mr Rory McCarthy was stepping down from the board.

Two other founder directors, Mr Tim McCarthy and Mr Brad Rosser, are also leaving. As well as owning the Virgin fashion label, Victory operates the six-strong chain of Virgin Vie perfume shops.