Austin Reed sales stay in the doldrums

The upmarket clothing retailer Austin Reed yesterday agreed a £4m property sale as it warned that the ongoing refurbishment of its flagship store in London's Regent Street continued to take its toll on trading.

Sales in the first 16 weeks of the year are 9 per cent below the same period last year, the company told shareholders at its annual general meeting. The redevelopment of its Regent Street shop, which represents 18 per cent of total selling space, will continue to hurt sales in the first half of the year. The project is on track to be completed in August.

Austin Reed also said it was seeing weaker sales in both London's financial district and its airport stores while sales at Country Casuals remained under pressure.

"The results for the full year will be dependent on trading in the second half of the year and the successful relaunch of the Regent Street store," it said.

Separately, the retailer said it had exchanged contracts with the housebuilder Persimmon Homes on the sale of a freehold industrial property.

Austin Reed, which obtained the site as part of its purchase of Country Casuals in 1998, is selling it to Persimmon for £4m and hopes the deal will complete on or before 5 December. The company plans to use the profits on the sale to cut debt.