Cost control begins to show
Fashion retailer Austin Reed announced it edged into profit in the financial year and has had a strong start to 2006, in its full-year results published today.

The clothing group made a pre-tax profit of£200,000 for the financial year ending January 28, compared with losses of£1.9 million last year. Group like-for-like sales were up 11.9 per cent in the 10 weeks to April 8.

At the main chain, like-for-like sales of the Austin Reed brand were up 1 per cent for the year. The improved performance was attributed to the store modernisation programme, in which 21 stores were refurbished during the year.

However, sales at the CC brand were down by 9 per cent on a like-for-like basis. Country Casuals was rebranded as CC over the course of the financial year, in an attempt to make the brand more contemporary. Like-for-like sales at CC in the first 10 weeks of the new financial year were up 12.1 per cent.

Group chief executive Nick Hollingworth said: 'I m pleased with the improvements made over the past year. We have returned the group to profit, controlled costs and reduced stock levels and net debt. The retail market continues to be challenging, but we are encouraged by a strong start to the year.'

The group also reported that it had reduced its net debt by£4.3 million to£7.3 million.

As part of its refinancing plans, last week the clothing retailer announced plans to sell and leaseback the group's warehouse and office facilities in Thirsk, North Yorkshire. The sale will net them£5.9 million, with a further£4.7 million becoming available if certain post-sale criteria are met.

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