Losses have widened at menswear retailer Austin Reed despite sales growing.

The tailor made a £2m pre-tax loss for its year to the end of January compared with £1.3m the year before. Sales rose 3% to £121m.

The company, which owns the CC and Viyella brands, was hampered by a £3m charge for “onerous lease provisions”.  On an operating basis it made a £973,000 profit, only slightly less than last year.

In May the suit maker decided to vacate its iconic Regent Street store to make way for brand-of-the-moment Superdry, as revealed by Retail-Week.com.

Superdry is understood to have paid a premium for the space. Austin Reed has taken a lease across the road and has promised the new store will “reignite the spirit of British heritage tailoring”.

The retailer has warned about the rising cost of raw materials, particularly wool.

It said: “Although the price of cotton has abated, other raw material prices, notably wool, continue to increase creating upward pressure on prices in the Far East where we source much of our product.

“The company will continue to balance the need to offer a quality product at an acceptable price whilst maintaining margin.”