Ethel Austin £150m sale looms

DISCOUNT retailer Ethel Austin is to create 2,500 jobs and virtually double in size through an expansion plan that highlights the contrasting fortunes in the cut-price clothing market.

The privately owned group, likely to be bought out soon by a venture capital firm for £150m, wants to open 200 more stores in the next five years. The plan, which insiders say has been accepted by all interested bidders, will increase the retailer's reach in Greater London and the South East.

Ethel Austin's profits have soared since a £55m management buyout two years ago that saw the 70-year-old retailer split from the property side of the family firm. Profits rose 158% to £12.5m as underlying sales from its 270 stores climbed 8.3%. This growth has continued since the turn of the year despite the downturn suffered by rivals such as Matalan.

Ethel Austin's management believes part of the chain's success is its focus on neighbourhood shopping parades at the expense of out-of-town locations and the High Street.

Chief executive Phil Hoskinson said: 'We have put a lot of effort into making sure that as a business we can support this prospective level of growth, but this programme has not appeared suddenly. It amounts to a development of the trading strategy put in place more than two years ago.'

The board had considered a flotation but it is understood that a strategic review has concluded the best route for the business is now a sale.