British-based clothing accessories retailer Tie Rack plc said last year's drop in earnings was largely due to the impact of the strong sterling and it did not expect a major improvement in business before 1999.

Tie Rack said yesterday that, in the financial year to February 1st, 1998, its pre-tax profit dropped to £5.1 million sterling from £8.8 million, on sales that fell to £104.2 million from £105.1 million.