Given womenswear only accounts for 20 per cent of group sales and profits, the impact was surprisingly severe.
But chief executive Chris Thomson has moved quickly to put the company back on track. The classic, more tailored look in womenswear has been restored and new management brought in. The result is a much more focused approach with a stricter attitude to costs.
The benefits are starting to show with a jump in pre-tax profits from pounds 1.7m to pounds 2.6m in the six months to August. Sales in the 46 shops were up by 8 per cent during the half and 9 per cent in the three months since.
With more focus on stock control there have been fewer mark downs and better margins. There are plans for three more stores but management's main priority is not to expand but consolidate what they've got.
Profits at the manufacturing division were flat but the factory has been completely overhauled and is winning new business. Licensing income was also static at pounds 1.4m though new deals have been signed in South-east Asia.
Like Moss Bros earlier this week, Austin Reed looks well placed to benefit from the consumer upturn as well as the popularity of classic tailoring. But it has to get the products right. The real change seems to be the new management which has brought a breath of fresh air to this near 100- year-old company.
Mr Thomson says last year was a blip. The shares have certainly traded erratically in the last two years, bungee-jumping between 160p and 240p. They closed up 5p to 219.5p yesterday. With NatWest forecasting full-year profits of pounds 5.8m, the shares trade on a forward rating of 18. Given the prospects, they are worth holding.Reuse content