Moss Bros sales drop, forecasts full-year loss
16 Jan 2020
Moss Bros has reported a drop in sales for the first half of the year and now expects to make a full-year loss, though it said it has made “good progress” with its business transformation strategy.
Total sales at the British men's tailoring specialist for the 24-week period to 11 January were down 3 percent compared to the same period last year, or down 3.2 percent on a like-for-like basis.
The company said it now expects to report a full-year adjusted loss before tax of around 1 million pounds.
Total retail sales, including e-commerce and wholesale, made up over 92 percent of group revenue during the period, down 1.6 percent compared to last year, or down 1.8 percent on a like-for-like basis. Online sales were down 0.4 percent. Online accounted for 17 percent of group revenue during the period, up from 16.6 percent last year.
Suit hire sales, which accounted for just under 8 percent of group revenue in the period, were down 17.7 percent on a like-for-like basis. The company said: “We continue to make progress in respect of newer hire services which may be offered to address the challenges facing our hire business and expect to be able to update on this in the first half of FY20/21.”
“We are gaining traction,” says CEO
The company’s Tailor Me order numbers, however, showed positive signs, growing by a healthy 55 percent.
The company remained positive that it has “identified a clear and comprehensive strategy which seeks to transform the way in which it operates in its marketplace, elevating the brand in the eyes of its customers and investing in key strategic levers in order to drive long-term performance.”
It said it had been successful in delivering full-price sales with less old season stock to clear, resulting in improved retail gross margin rates over the period, and while like-for-like sales were down, they were also broadly in line with the board’s expectations “against a backdrop of ongoing weak consumer confidence.”
Retail trading gross margins for the period grew by around 300 basis points compared to last year due to a reduction in the level of clearance activity throughout the half, lower levels of promotional discounts and improved sourcing prices.
Commenting on the results in a statement, CEO Brian Brick, said: “We are gaining traction across a number of strategic levers which are aligned with our longer-term strategic goals. We have seen more intensive discounting from our competitors and a materially lower level of footfall across the high streets and shopping centres of the UK.
“Despite this, we have resisted discounting pressures, facilitated by our careful buying plans which have meant that we are holding lower levels of terminal stock to clear. This has been particularly evident in our High Street stores where we were able to focus on delivering our core purpose of styling individuals for on form moments.
“Despite the delivery of progress against our strategic levers, we anticipate the year ahead will continue to be challenging until we see an improvement in consumer confidence and a stabilisation in footfall across UK shopping destinations combined with a re-alignment of occupancy costs to properly balance the costs and rewards of doing business in physical retail stores.”
Photo credit: Moss Bros, Facebook