AN online fashion retailer, which attracted investment from Sports Direct founder Mike Ashley, has issued a profits warning.

MySale reported flat revenues for its Australia and New Zealand markets in the five months to November 30, leaving profits for the year to June "materially below market expectations."

The site, launched in Australia in 2007, received backing from Newcastle United owner Mr Ashley, who owns about five per cent, and Topshop boss Sir Philip Green, who has nearly a fifth.

Since the site floated at 226p in June, its shares have fallen by 61 per cent, giving the business a market value of £135m.

It is understood the decline in the share price means Sir Philip saw his holding lose nearly £30m in value, with Mr Ashley losing £6m.

MySale said competition and a weakened economic outlook in Australia and New Zealand meant it expected sales in the region to be flat compared to a year ago.

It has agreements with more than 2,500 brands and retailers, which sell surplus or out-of-season stock on its websites.