DESPITE going through a tough spell in the retail sector, Oriental Watch Holdings says it cut costs and boosted attributable profits to $40.54 million for the year to March, up 19 per cent over the previous year. Turnover for the year rose six per cent to $1.1 billion, and earnings a share were 16.8 cents, up from 15.7 cents in the previous year. Directors have recommended a final dividend of five cents a share, against four cents in 1994. Oriental Watch chairman Yeung Ming-biu said the slowdown in the economy had affected the retail sector, but the group had improved margins and two new retail outlets had been established during the year - in Tsim Sha Tsui and Shenzhen. The group had secured distribution rights for Cerutti 1991 watches in China, Hong Kong and Macau and had launched 'Polar' watches in Hong Kong and China since the end of the financial year. Mr Yeung said the company planned to launch a new outlet in Mongkok in September, but warned of tough times ahead. 'Within the foreseeable future, it will be difficult for the retail business in Hong Kong due to the declining customer purchasing power and high inflation,' he said. The group rents three of its seven premises.