Fat Face, the fashion retailer bought by Bridgepoint at the top of the market, has partly allayed fears about its balance sheet after reporting solid full-year profits.

The private equity group paid £360m for the chain in March last year, more than three times the company’s sales. The nominal value of its debt has plunged in the wake of the credit crisis, partly because of worries that it is over-indebted going into a consumer downturn.