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Austin Reed denies rift at the top as chief departs

Austin Reed, the tailored clothing retailer, yesterday parted company with Chris Thomson, its chief executive, in a surprise move that unsettled the market. Dismissing speculation that he was forced out, the company preferred to talk about growing demand for its clothing and its ambitious expansion plans, writes .

Mr Thomson abrupt departure from Austin Reed lead many observers to speculate that he been pushed out after presiding over blunders including taking the group into women's casual wear.

However, Colin Evans, Austin's chairman said that Mr Thomson's resignation was "mutually agreed" after management reorganisation last year left him with no real role.

Mr Thomson, who has been with Austin Reed for eight years, seven as finance director, earned pounds 108,000 basic last year plus pounds 25,000 bonus and, on a two-year rolling contract, could receive more than pounds 260,000 in compensation. Shares in Austin Reed slid 5p to 222.5p.

Speaking as the group announced a 9 per cent rise in interim profits to August to pounds 2.5m held back by its depressed manufacturing business, Mr Evans denied there had been a rift with Mr Thomson: "His departure was mutually agreed. Chris is a very dynamic person and needs to be fully stretched. With the new managing directors on board, his responsibilities have been devolved down and there is a bit of a void."

As part of a wide ranging reorganisation, Austin Reed last year appointed two divisional managing directors, Roger Jennings to head up the group's retail division and Colin Houlihan to oversee the more difficult manufacturing business, which makes clothes for other retailers as well as its own shops.

Joan D'Olier, textiles analyst at NatWest Securities called the resignation "a great surprise". She added: "It is not as if the new board members have just been recruited. But we only have the party line to go on at the moment."

Mr Evans said that trading in womenswear, which had fallen after a disastrous shift from tailored to casual ranges, had bounced back. Against a background of rising consumer demand, like-for-like sales in retail grew 8 per cent at the half year and 6 per cent in the current year despite a lull in sales immediately following the death of Diana, Princess of Wales.

In a reversal of strategy, Mr Evans said the group did not now plan to open women's-only clothes stores, but did want to add to the group's 45 shops and single concession over the next three years with acquisitions also "firmly on the agenda".

Mr Evans said that the group planned to reassess its European markets, decreasing the number of customers and developing in new areas such as Spain and Scandaniavia. There are no plans to shift manufacturing overseas.