The trend towards "dress-down Fridays" and other office scruffiness is over, and the suit is back with a vengeance - or at least that's what Moss Bros is hoping.

Britain's best-known formal wear retailer has just announced a hefty loss, blaming an ill-managed foray into the casual end of the market.

In three years, Moss Bros has gone from a �16m annual profit to a �4.9m loss, a performance that chairman Keith Hammill described as "unsatisfactory".

But now, says Mr Hammill, "there is evidence that fashion trends are returning to more formal dressing, an area where Moss Bros has a significant market share."

According to market research service Fashion Trak, spending on men's formal wear has increased by 5% in the past year, while spending on men's casual wear has dropped by 9%.

Down at heel

The main blame for Moss Bros' fading finances can be pinned on its investments in down market brands, including informal label "Code" and the out-of-town "Brand Centre" discount chain.

The two doomed chains accounted for losses of �3.2m in the past year.

That's partly because, Mr Hammill admits, the firm lacked the expertise and co-ordination to succeed in untried areas at the same time as maintaining its core Moss Bros, Hugo Boss and Cecil Gee chains.

Code and Brand Centre are now being discontinued.

Moss Bros fortunes look especially dismal when set against industry peers such as Austin Reed, which has remained truer to its core strategy despite the vagaries of fashion.

Also on Thursday, Austin Reed announced a 21% increase in pre-tax profits, and said like-for-like sales were rising by 10% year on year.

Recovery hopes

Stung by its plunging share price, Moss Bros has now launched a concerted recovery programme, spearheaded by a raft of new executives hired from British High Street leaders.

The company is boiling down its brand range into three streams - the upmarket "Premium", the new "Moss" brand for its core business and "Value Stores" to help shift surplus stock.

At the same time, it has committed itself to a greater focus on efficiency and merchandising, something that the firm let slip during the late 1990s.

The company claims to have enjoyed a 20-30% sales jump at the handful of stores it has revamped so far.