Esprit, the German fashion brand that pulled out of the UK two years ago, is to open two new megastores there, said Retail Week.

The stores will be located on Regent Street and at the Bluewater shopping mall. The Bluewater store is due to open next Spring. Retail Week reported that the company is thought to be close to signing a multi-million pound deal on the Warner Bros Studio Store on London#;s Regent Street.

European chief executive Heinz Krogner refused to comment on the new stores. He said: " Of course we are looking to come back, but we haven't signed any stores yet." However, a further announcement is expected next week.

Esprit closed its nine UK stores in 1998 because of poor sales. At its peak in 1996, it operated 16 outlets in the UK.