Temple Row's lack of high-end retailers and the lure of the Bullring continue to hamper Austin Reed's Birmingham store, despite an improved sales performance in the last six months.
Amidst disappointing results from the group's Country Casuals division, group chief executive Nick Hollingworth said he was frustrated by the lack of retailers opening around St Philip's Square.
"When we moved into the site we were given the impression area was to be an exclusive, upmarket venue for international brands.
" We are slightlygh tly disappointed that there has not been the development we expected.
"The truth of it is we are doing well in a slightly difficult location."
Mr Hollingworth said the lure of new shopping centres may have driven shoppers away from the Colmore Row area of the city.
"I suspect developments like the Bullring and Touchstone in Solihull have changed people's focus about where to shop.
"It's a shame, it would be nice for Colmore Row to offer a slightly different shopping experience to the affluent customer."
The chief executive's comments came as the group narrowed its losses to £1.1 million in the six months to August 13.
However, recent trading at CC - as the Country Casuals division is now known - showed a 15 per cent slide in like-for-like sales.
CC sales for the six months were £23.1 million, against £ 26.3 million last time, although margins improved sharply as the division focused on full price sales and avoided excessive discounting.
However, Mr Hollingworth said the firm had been disappointed with the relaunch and rebranding of CC.
"We know we haven't got it all right but we're trying to reinvent the brand in very difficult retail conditions."
He expects consumer demand to remain subdued for the remainder of the year.
"I don't think Christmas won't happen at all but I'm relatively pessimistic about the outlook for retail," he added.
However, Mr Hollingworth drew encouragement from the improvement in interim losses from £2.8 million last year, which came after the company took action to increase margins, control costs and reduce stock levels.
Performance across the Austin Reed chain continued to be solid, up by one per cent in the seven weeks when stripping out the impact of weaker tourist market on the company's flagship outlet at London's Regent Street.
Improved buying terms and more effective discount policies meant margins increased by 1.6 percentage points.
Brand sales from the division in the first half were £400,000 lower at £28.5 million, although this was affected by the closure of unprofitable branches in 2004 and a nine per cent reduction in sales at Regent Street. Stripping out these factors, like-for-like sales were flat.