Country Casuals hits Austin Reed

AUSTIN Reed chief executive Nick Hollingworth today played down takeover speculation as the classic clothing retailer reported a tumble into the red, hit by a big fall in sales at its Country Casuals chain.

Finance group Dawnay Day has built a 28.12% stake in Reed, but Hollingworth said it is 'supportive'.

'Dawnay Day can see the value in the brands and the potential to turn the company round. They are in for the long term.''

The group suffered losses of £2.7m in the six months to 14 August as sales edged up from £56.4m to £57.3m. After exceptional items, the pre-tax loss is £3.3m, against a £3.5m profit last time. There is no dividend.

Like-for-like sales fell 4% but the drop at the Country Casuals women's chain was 11%. Hollingworth, appointed in April, described the results as 'unacceptable' but outlined moves to update the group's image and broaden its appeal to younger customers.

'It used to be that when women got into their 40s they started dressing like their mother. Now they want to look like their daughters,' he said.

At Austin Reed, the improvement seen in the spring continued into the summer, with like-for-like sales ahead 4%, excluding the revamped store in London's Regent Street where sales jumped 31%.

Cost-saving moves should bring benefits of £500,000 in the second half and £3m in the full year.