Austin Reed back on track

British apparel chain Austin Reed has posted gains in turnover and profits for the first half of the year. Sales were up 6.7 percent to £55.9 million, while pre-tax profits for the six months ended 12 August rose to £500,000, up from losses of £1.1 million the year before. "By improving our product, stores and service we have broadened our appeal to customers and increased our sales and margins," chief executive Nick Hollingworth said in a statement. He attributed the elimination of debt to good cash management and the sale and leaseback of the group's Thirsk site.

Sales of the Austin Reed brand increased 7.2 percent to £30.5 million, with like-for-like sales up 3.3 percent. "We definitely have a better product to thank for the improved results," says Alan Charlton, the group's financial director. "We now have people at the helm of both the Austin Reed and CC brands that have more talent and flare." The CC brand, formerly known as Country Casuals, saw sales in the first half rise 4.4 percent to £24.1 million. Like-for-like sales jumped 10.5 percent. The rebranding of the line has been completed and it now focuses on women who want smart outfits for both day-to-day wear and for formal occasions. This offering is hitting the right notes on the high street, where Charlton has noticed a trend change taking place. "During the past five or six years, fashion has dictated an informal, almost grunge-like style," he says. "We are now seeing that consumers are favouring a more formal, tailored look, which is exactly what Austin Reed and CC offer. I don't expect this to be a short-lived trend." Not only have consumers' tastes changed favourably for the group, London 's recovery from the aftermath of 9/11 and the bombings last year has also proved positive. Sales in the Austin Reed flagship store on Regent Street - which do not include like-for-like sales - leapt 13.3 percent in the first half. " London is thriving again. Add to that our own brand recovery and the results speak for themselves," says Charlton. He adds that the brand is currently one of the top performers in department stores.

Austin Reed's overseas licensing business is considerable, accounting for £124 million in sales. The company recently signed new licenses in Russia and Japan . "It is a relatively low risk business and generates £1.5 to £2 million profit for the group," Charlton explains. He also said that, in addition to the group's refurbishment of current stores, it is looking for new locations.

For the first five weeks of the second half ended 16 September, group like-for-like sales rose 11.6 percent. The Austin Reed brand saw total sales rise 15.1 percent, with like-for-like sales up 5.9 percent. Meanwhile CC sales gained 13.4 percent, with like-for-like sales up 16.2 percent. Hollingworth says he remains "confident in our recovery strategy."