Shirtmaker TM Lewin is pivoting towards t-shirts and knitted sweaters as the AI-driven cutback in graduate hiring means fewer young workers need shirts and ties.

The retailer, which was established in 1898, has expanded its range of casualwear since returning to British high streets after its collapse into administration at the start of the decade. 

Dan Ferris, TM Lewin’s managing director, told that its expansion away from solely producing formalwear has in part been driven by artificial intelligence, which he said has “diminished” the pool of young graduates taking up jobs in the City. 

The shirtmaker, which operated more than 150 shops during its peak in the mid-2010s, called in administrators in June 2020 after the Covid-19 pandemic saw demand for suits and ties plummet as lockdowns kept workers at home.

TM Lewin was bought out of administration in that year by Torque Brands, an arm of US-based private equity firm Stonebridge, before collapsing again in March 2022, as its new online-only model failed to bear fruit. 

The retailer has slowly begun opening new stores in recent months, at Square Mile sites including Bow Lane and Liverpool Street, but Ferris said it has been forced to expand its range of casual items like knitwear and shorts to keep up with changing demand.

He added the return to in-office work following the pandemic has boosted demand for suits and ties, though the retailer has been forced to adapt to new working habits.

“Most companies are at least one day working from home, so that’s one less day that you’re wearing a shirt,” he said. “If someone’s only in the office for three days, or if they’re wearing a polo or a knit when they are in the office, then that’s another day that you lose them. 

“I think a lot of office workers were wearing a suit and shirt five days a week pre-Covid, so it’s demonstrably, materially changed, and I don’t think, at least for the foreseeable future, it’s never going to go back to that.”

While TM Lewin used exclusively to sell formalwear, its range is now split half and half between suits and casualwear, Ferris said, with its recent best-sellers including rugby shirts and fisherman-style knitwear.

Asked whether TM Lewin is seeing lower formalwear demand from graduates, as City firms hand entry-level tasks to artificial intelligence agents, Ferris said: “Exactly. It reduces that pool of new customer acquisitions.

“We know that that pool is diminishing. Maybe it will grow again when everyone realises that you need people to do things as well as they are. But we’ve had to look to other areas to grow [while] that new graduate pool has diminished.”

The graduate hiring slowdown “is not just in finance,” he added. “You look at the tech industry, for example, and the layoffs are in the thousands almost every week? It’s obvious that AI is having an impact on employment.”

The number of graduate job vacancies in the UK fell to a record low in September, according to jobs platform Adzuna, with professional services giants like PwC and KPMG among those swinging the axe.

TM Lewin’s sales are 40 per cent higher year-on-year and it is set to open two new stores in November – in Victoria and Bluewater, Kent – but Ferris said the retailer will “never go back” to the sprawling footprint it had before its collapse. 

The shirtselling boss said high rents and rising business rates bills mean the company has had to “work really hard” to find viable locations for new stores. 

Ferris added he was “stunned by how little support” John Healey offered to retailers at last month’s Budget. The Chancellor was criticised for claiming to freeze business rates for high street businesses despite allowing the tax to continue rising with inflation.

“They’ve tried to do things, but the reality is, it’s just not helping retailers,” Ferris said. “You’ve got retailers going into administration consistently over the past two, three years, and this is not going to stop unless the government provides more support.”