Tailoring brand Austin Reed to close stores as part of restructuring

TAILORING brand Austin Reed Group is set to close 31 stores and receive a £3m cash injection from shareholders through a  company voluntary arrangement (CVA) in an attempt to secure its long-term future.

The Thirsk-headquartered fashion retailer, owned by Darius Capital, is hoping to strike a deal with landlords in which they would accept a fifth less rent on 35 stores and 50% less on a further 31, which however are then likely to close after six months, according to reports.

Under a CVA, a further 166 stores would continue to trade as normal, including Austin Reed’s flagship store on Regent Street in London.

Creditors, mainly landlords, are due to vote on whether to accept the company’s proposals next month.

Nick Hollingworth, chief executive of 114-year-old Austin Reed Group, told The Guardian: “The decision to close some stores was not taken lightly, but we cannot continue to operate those within our portfolio that are loss-making.”

Austin Reed fell into pretax losses of £1.29m in the year to January 2014, according to accounts filed at Companies House.

Neville Kahn and Rob Harding of Deloitte have been appointed to oversee the CVA.