Ethel Austin has begun a brand-building offensive after being granted a £5 million cash injection from its owners.

The value clothing retailer, which was refinanced this summer after breaching its banking covenants, will launch a£1 million national TV ad campaign to drive sales of its womens-, baby- and childrenswear ranges. It has exited the menswear and homewares categories.

Ethel Austin began talks with its lenders in spring, after weaker-than-expected trading in the year to September 2006 resulted in pre-tax profits falling from£4.8 million – excluding a one-off fixed asset sales charge – to£217,000.

In a debt exchange for almost all of the retailer’s equity, Credit Suisse, New York investment firm Eos Partners and ABN Amro wrote down Ethel Austin’s debts to less than£20 million, from£57 million.

Chief executive Simon Cooper told Retail Week that the business was “not in a distress situation” and that the new campaign, along with its£6 million store refurbishment programme, would lead to a more “up-to-date and professional” environment and personality for the retailer.

Ethel Austin will complete the overhaul of its 307 stores, converting them to its new fascia and streamlining layout, by Easter and also open three shops next year.

The TV ad, which carries the strapline “Feel special, look great”, will launch next month. Lee Publicity has also been appointed to bolster the retailer’s credentials in the press.

Cooper said: “We’ve never really marketed Ethel Austin before. It is still about value, but we are confident about our quality.”

He declined to comment on current trading, but said that the retailer has changed strategy to focus on tailored promotions rather than heavy discounting.

Plans for capsule collections – such as the Katherine Hamilton line piloted this spring, which is no longer in stores – are on hold. “We didn’t launch at the best time, but we will probably try Katherine Hamilton again,” said Cooper.