Ethel Austin will launch a trend-led sub-brand called Katherine Hamilton next month in a bid to bump up its fashionability.
The value retailer, which kicked off a store refurbishment programme last year, will trial the womenswear collection in 50 stores in May.
A spokesman for Ethel Austin said the range was designed to appeal to a younger, more aspirational market. "Since the refits, our strategy has been leaning towards raising our fashionability, so this is a younger, trend-led range of smart/casual womenswear," he said. He added that its core target market was women aged 35 and above.
The range, which will have 16 lines, will be the chain's fourth sub-brand.
Seymour Pierce analyst Richard Ratner said the move made sense. "The fast-fashion market is getting overcrowded, but this strategy could work for Ethel Austin. It certainly did for Peacocks," he said.
Ethel Austin added that it would focus on developing its footwear and accessories ranges and also planned to streamline its homewares department. It will complete its refurbishment programme by October, with six stores being refitted each week from June. To date, 160 out of 309 shops have been refitted, which includes a new store fascia and layout.
In May, the chain revamped its website in line with the store overhaul, with the Ethelaustin.co.uk site now showcasing women's, men's and kids' clothing. Although it is not transactional, the previous site was limited to listing job vacancies.
The new design, developed by the business's in-house IT team, also enables users to apply for jobs online.
The 309-store chain received a £5 million cash injection from its owner, Dutch private equity firm ABN Amro Capital, in February 2006.
Profits at the chain fell 22.7% to £9.9m for the year to September 3, 2005. The company is due to post its results for 2006 at Companies House on June 30.