The Original Factory Shop saw pre-tax profits rise by 16.4% to £7.6 million for the year ended March 31 defying the downturn.
The Original Factory Shop added that the performance had continued into its new financial year, with like-for-like sales over the last four months up by 3.2% and total sales up 17%.
The Original Factory Shop chief executive George Foster said that the chain was attracting shoppers because of its value proposition. The retailer plans to capitalise on the demand for low price points by opening 20 new stores by the end of the current financial year.
Foster added: "Despite the difficult retail climate, our last financial year has been our strongest yet."
The Original Factory Shop was bought by private equity house Duke Street Capital for £68.5m last December.