Heavy losses are predicted for Oroton Group after it announced it will no longer distribute Ralph Lauren in Australiasia from June 30 next year.

Oroton chairman Ross Lane said in a statement he was “disappointed” to be ending its business partnership with the fashion brand in Australia and New Zealand after 23 years, but is pleased to be in a position to accelerate the expansion of the Oroton brand in Asia and other opportunities including capital management.

The company said the business would be transferred to Ralph Lauren corporate next year with the global brand required to pay Oroton for certain inventory and store assets currently valued at $30 million.

Oroton stated that on top of the loss of earnings, the Ralph Lauren business soaks up 35 per cent of corporate overhead expenses for the group and said next year’s results will reflect one-off costs associated with the transition.

According to Oroton, Ralph Lauren currently accounted for 45 per cent of group sales and 35 per cent of net profits.

Sally Mcdonald, CEO of Oroton, said the year’s financial result will be announced to the market on September 20, and is not expected to be materially affected by the announcement.

“The group’s like-for-like sales for fiscal 2012 were nine per cent higher, with net profit about the same as last year, at $24.8 million,” McDonald said.

As for Ralph Lauren, the fashion retailer is expected to continue its expansion within the Asian market opening new stores in Hong Kong and Shanghai next year.