Moss Bros half-year sales take a -3% drop

Moss Bros

In the latest trading update – covering the 24-week period from 28 July 2019 to 11 January 2020 – Moss Bros Group has today reported total sales down -3% year-on-year, and -3.2% on a like-for-like basis.

Total retail sales, including e-commerce and wholesale, comprised over 92% of group revenue during the period and were -1.6% lower than last year and -1.8% lower on a like for like basis.

Online sales from Moss Bros’ own website and other online marketplaces were down -0.4% on last year. Online comprised 17% of group revenue during the period, up from 16.6% last year.

Hire sales, which accounted for just under 8% of group revenue in the period, were a substantial -17.7% lower on a like-for-like basis.

Like-for-like sales for the period have been broadly in line with the board’s expectations against a backdrop of ongoing weak consumer confidence.

The group expects to report a full year adjusted loss before tax (pre-IFRS16) of approximately -£1m.

Commenting on the outlook, Moss Bros CEO, Brian Brick, said: “As I noted at the time of our interim results in September, 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.”

For Moss Bros’ Tailor Me service, where suits can be designed online, then appointments booked to be measured in-store, and suits collected within 21 days, order numbers grew by 55% across the period versus last year.

Brick added: “We continue to deliver against our brand elevating customer value proposition of offering our customers the chance to ‘Make It Yours’, whether they wish to hire, buy or customise their outfit using our Tailor Me service, which goes from strength to strength.

“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.”

Moss Bros’ store portfolio continued to be actively managed and optimised. One new store opened during the year to date, two stores were relocated and two stores closed. The total estate is now 128 stores.

The group maintains flexibility in its store portfolio, with the average remaining lease length to either the next break or expiry being 28 months.

Despite the well-documented challenging retail marketplace, the group says it has made “good progress” overall, underpinned by a strong balance sheet and flexible store portfolio.

A key focus in the period has been on delivering full price sales with less old season stock to clear. This has been successful and has resulted in improved retail gross margin rates throughout the period.

In line with the strategic aim of elevating the brand, retail trading gross margins for the period grew by 300 basis points versus last year, as a result of a reduction in the level of clearance activity throughout the half, lower levels of promotional discounts and improved sourcing prices.

“We remain debt free, with a strong balance sheet, and are confident in our ability to deliver enhanced returns to our shareholders over the longer term,” concluded Brick.

Moss Bros anticipates that the value of retail gross profit for the full year will be delivered at or above last year. The group will announce its preliminary results on 25 March 2020.