It has also appointed a head of marketing following the departure of Andrew Woodward to John Lewis in June.
Chris Holmes, who was promoted internally from retail consultant, becomes Austin Reed's brand and marketing director and will oversee the brand relaunch.
The retailer is understood to want to move away from its image as a brand for City suit-wearers and appeal to a more general menswear consumer.
AIS takes over the account from Yellow Door Creative Marketing, which was hired in September 2002. In February this year it repositioned the brand as more 'aspirational', targeting the younger market.
This month sees the launch of Yellow Door's swansong campaign, featuring images of men in Austin Reed clothing against City landmarks such as Norman Foster's 'Gherkin' and the Lloyds building.
AIS's inaugural work is likely to kick off next year to promote the retailer's spring collection. The relaunch follows a fall in retail sales of 2.6% in 2002, and coincides with the launch of the brand's flagship Regent's Street store at a cost of £12m.
The store accounts for 18% of the firm's turnover, which has been significantly hit by the 13-month refurbishment.
The company has been on the receiving end of a series of share bids, which chief executive Roger Jennings has rejected.
Neither Austin Reed nor AIS would comment as Marketing went to press.
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