Shirtmaker TM Lewin now splits its product range half and half between formalwear and casual clothing, as managing director Dan Ferris says artificial intelligence has "diminished" the pool of young graduates entering City jobs who once formed the core of its customer base.

The 1898-founded retailer, which collapsed into administration twice in recent years, has expanded into t-shirts, knitted sweaters, rugby shirts and shorts as demand for suits and ties undergoes what Ferris calls a permanent structural shift.

"Most companies are at least one day working from home, so that's one less day that you're wearing a shirt," Ferris told City AM. "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."

What has changed for the retailer?

TM Lewin operated more than 150 shops at its mid-2010s peak. The Covid-19 pandemic ended that era: as lockdowns kept workers at home and demand for suits and ties plummeted, the company called in administrators in June 2020.

Torque Brands, an arm of US-based private equity firm Stonebridge, bought the business out of administration that year. The rescue failed. TM Lewin collapsed again in March 2022 after its new online-only model, stripped of physical stores, failed to bear fruit.

The retailer has since returned to British high streets, opening Square Mile locations at Bow Lane and Liverpool Street in recent months. Two more stores follow in November — one in Victoria and one at Bluewater in Kent.

Ferris said the return to offices after the pandemic has lifted demand for suits and shirts, but not to pre-2020 levels. "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," he said.

The shift is visible on the shop floor. Recent best-sellers include rugby shirts and fisherman-style knitwear, items with no place in the brand's former formalwear-only catalogue.

How is AI hitting the business?

The more consequential pressure, in Ferris's telling, comes from hiring. City firms increasingly hand entry-level tasks to AI agents, and each unfilled graduate seat represents a lost first-time shirt buyer.

Asked whether the company is seeing weaker formalwear demand from graduates, Ferris said: "Exactly. It reduces that pool of new customer acquisitions."

"We know that that pool is diminishing," he continued. "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 slowdown extends beyond banking, 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."

External data supports the claim. Graduate job vacancies in the UK fell to a record low in September, according to jobs platform Adzuna, with professional services giants PwC and KPMG among the firms cutting entry-level roles.

What about the numbers and the high street?

The pivot appears to be working commercially. TM Lewin's sales are 40 per cent higher year-on-year, even as the retailer rebuilds a fraction of its former footprint.

Ferris said the company will "never go back" to the sprawling estate of more than 150 stores it ran before its collapse. High rents and rising business rates bills mean it has had to "work really hard" to find viable locations for new shops.

He was blunt about last month's Budget, saying he was "stunned by how little support" Chancellor John Healey offered retailers. Healey was criticised for claiming to freeze business rates for high street businesses while allowing the tax to keep 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."

A 127-year-old shirtmaker betting half its range on knitwear is the clearest signal yet that AI is reshaping not just who gets hired, but what the workforce wears.