Icelanders' £3m cash boost bails out Queen's dressmaker

Iceland's business elite tightened their grip on British fashion yesterday after Hardy Amies, the UK's last remaining couture house, became the latest company to fall under their sway.

A company run by a former Baugur executive has given Amies a crucial £3m cash injection on the fashion house's 60th anniversary. Arev, run by Jón Scheving Thorsteinsson, who led Baugur's acquisition of Hamleys, is taking a 49.9 per cent stake in Amies in return for the cash. The deal comes weeks after Arev acquired Ghost, the designer women's brand famous for its elegant dresses.

Mr Thorsteinsson, a close friend of Baugur's chief executive, Jon Asgeir Johannesson, came to Amies' rescue after a year that saw its losses double to £1.2m after hefty investment in rebuilding the brand.

Tim Maltin, Amies' chief executive, said the cash would set the group up for its return to the high street after more than two decades. It will start selling men's off-the-peg clothing in upmarket stores including Harvey Nichols from July and has plans to follow suit with womenswear, possibly in autumn 2007.

He said the brand had become "sleepy", and it was "unable to keep up with the huge rate of expansion that other companies such as Ralph Lauren enjoyed in the Eighties." Mr Maltin's aim was to recreate the sort of lifestyle brand its founder, Hardy, built from the fashion house's inception in 1946. A fashion show last night in the Victoria & Albert museum marked the anniversary.

Amies is issuing 104 million new shares to Arev, which will put one of its executives, Andrew Manders, on the group's board as chairman.