Discount retailer Matalan has bought up-market knitwear firm Wolsey.

Matalan, the UK's largest out-of-town fashion retailer, did not say how much it had agreed to pay for Wolsey, which makes men's underwear as well as sweaters.

Wolsey had sales of �14m in 2001, and made pre-tax profits of �900,000.

Wolsey, based in Leicester, has a history going back to the eighteenth century and holds a Royal Warrant from the Queen, said Matalan.

It also held a Royal Warrant to supply the Queen Mother, who died last month.

Stylish socks

Matalan, which is mainly known for its out-of-town discount stores, said the Wolsey brand has been selling well in its shops.

As well as sweaters, Wolsey makes socks - ranging "from golfing to dress socks" to team with dinner jackets - and a range of pyjamas and casual shirts.

"This acquisition is a continuation of Matalan's strategy to acquire brands that complement its existing business, said Matalan.

"Matalan intends to grow the brand and company substantially," it added.

International brand

Wolsey's clothes are available in all 143 of Matalan's stores. The firm also supplies other major UK department stores and retailers and sells its goods in 50 countries.

Matalan chairman John Hargreaves said the purchase of Wolsey would complement the firm's two existing brands - Lee Cooper and Falmer - which are both makes of denim jeans.

Sales of Wolsey's clothes "have significantly increased in Matalan stores and we intend to invest in the brand to ensure its ongoing growth and development," he said.