UK retail head exits as Austin Reed goes into red

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The Independent Online

Austin Reed, the embattled men's and women's clothing retailer, said yesterday that its head of retail in the UK would be leaving after it announced a 5 per cent fall in same-store sales due to weak trading at its Country Casuals chain.

Austin Reed, the embattled men's and women's clothing retailer, said yesterday that its head of retail in the UK would be leaving after it announced a 5 per cent fall in same-store sales due to weak trading at its Country Casuals chain.

Austin Reed is forecasting a half-year loss, before tax and exceptional items, of £3m. This compares with a profit of £1.1m for the same time last year. Analysts have revised their estimates for the year from a profit of £2.5m to a loss of £7.5m, including £4m of exceptionals.

The 5 per cent fall in like-for-like sales for 23 weeks to 10 July 2004 comes two months after Austin Reed revealed a 4 per cent fall for the 16 weeks to 22 May. Concerns then at the performance of the Country Casuals womenswear brand have been voiced again, with sales and margins showing further deterioration as prices have been reduced to shift stock.

The company is to spend £3.5m to close its Country Casuals concession operations in Canada and on making other profit-improvement initiatives. It is also incurring a £2m charge as it adopts a more aggressive write-off policy on its Austin Reed stock.

These are the first initiatives following Nick Hollingworth's appointment as chief executive in April, replacing Roger Jennings who was ousted in January. The changes are expected to generate £500,000 of benefits in the second half of the year and £3m in a full year.

Austin Reed said yesterday that David Lowbridge, its UK retail managing director, is to leave the company. Mr Lowbridge joined Country Casuals in 1988 and was acting chairman for the group between January and April this year. He competed for the role of chief executive of Austin Reed, but lost out to Mr Hollingworth. His departure removes a layer of management and the two brand directors will report directly to Mr Hollingworth.

Last year's £12m refurbishment of the flagship Regent Street store is beginning to come to fruition, the group said. But Mr Hollingworth said there was still work to do on the store and that the operational review was not yet over. Of the Country Casuals brand he said: "We know what the problems are. Some we did to ourselves. Some were by the competition, but we know what we did wrong and we know we can change it."

Rumours of a takeover continue. The investment group Dawney Day has increased its stake to almost 20 per cent.

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