BusinessCompany NewsAustin powers ahead

Austin powers ahead

The slow demise of the dress-down culture will be welcome news to high street clothes retailer Austin Reed, due to report its final results today.

As more companies tell their employees to get back into a business dress code, so sales at the retailer have crept up after dire warnings that the end of the suit meant the end of Austin Reed.

Now the retailer is expected to reveal strong full year numbers and a fat dividend. So much so that a number of institutional investors, such as Throgmorton Investment Trust, have increased their stakes in the company.

Underlying earnings were expected to be up nearly 20% to around £8m, and earnings are predicted to rise by a further 9.5% this year, reaching £8.75m.

But these figures could also lead to a bout of profit taking once they are confirmed.

Back in January Austin Reed saw a 7% increase in total retail sales and a 6% increase in like for like sales during the five weeks over December and into January. For the Autumn/Winter quarter, sales were not so buoyant, hitting a 3% total.

The company at the time announced it was putting in place a number of initiatives to build on the modest increase in sales.

‘We are doing a major marketing push on formal wear and we’re launching a new signature range,’ chief executive Roger Jennings said. But the retailer will still continue to focus on its smart casual range.

The company has also announced it will carry out a redevelopment of its flagship store in Regents Street, London, at a cost of £12.3m. This is hoped to increase annual turnover by 40% in the store.

In September last year, Austin published its interim statement, revealing sales of £58.4m, up 9%, for the first half of the year.

At the same time, pre-tax profits were up an impressive 73%, reaching £2.5m – at the same time the previous year the high street retailer reported a loss of £5.7m.

The results were bolstered by a strong performance from its subsidiary Country Casuals, which launched its ‘Petite’ collection earlier in the year.

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