CLOTHING chain Austin Reed said Christmas had brought better sales and profits for its main brands.

Austin Reed, which has its administrative and distribution centre in Thirsk, North Yorkshire, said the growth in like-for-like sales at its main chain had accelerated to 2.7 per cent in the 15 weeks to January 14, from one per cent in the previous seven weeks.

Margins were also higher as the company held its nerve and sold clothes at the full price as demand for men's formal and casualwear rose along with accessories and womenswear.

Recent trading at CC - formerly known as Country Casuals - was also better, as same-store sales were 10.5 per cent lower during the past 15 weeks, compared with a drop of 15 per cent during the seven weeks to October 1.

"Despite this sales performance (at CC), margins are ahead of last year," Austin Reed said.

Austin Reed has been trying to reflect younger tastes in the over-40s market as part of its efforts to turn around the performance of its CC division, which operates from about 65 shops and 125 concessions.

In October, the company conceded that further work needed to be done on its autumn product range and that it was bringing in new designers and buyers.

"The full effect of these changes will not be seen until later in 2006," Austin Reed said.

"We are, however, encouraged by customer reaction to the early deliveries of spring 2006 products."

Yesterday's update showed that total sales of the Austin Reed brand were up 6.3 per cent after factoring in a recovery at its flagship store in London's Regent Street, but were 17.8 per cent lower at CC.

Seymour Pierce analyst Richard Ratner said the trading update was better than he had feared and he cut his forecast for annual losses from £2m to £500,000.

He said: "We believe that there is potential takeover interest, but the performance of CC might act as a poison pill for most predators."