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Moss Bros issues profit warning due to stock shortages

Lauretta Roberts
21 March 2018

Menswear retailer Moss Bros has said it expects its profits for the year ending January 2019 to be "materially lower than current market expectations" due to a shortfall of stock following the consolidation of the group’s supplier base.

The business said that it had rationalised its suppliers as a result of the devaluation of Sterling following the Brexit vote and this had led to short-term issues with the availability of stock, which it says will have "a negative effect on sales in all retail channels and will continue to do so until late Spring".

It added that its hire business remained "challenging", though it noted that the peak hire season was yet to come, and that a decline in footfall, experienced towards the latter part of December, has continued, reflecting a more cautious consumer environment.

CEO Brian Brick said the stock situation was being rectified. "Although this has been a painful experience, I am confident that the availability issues are well on track to being resolved and the margin benefits from the consolidation will flow through.

"This stock shortage, has led to a disappointing start to the year and whilst we are still at a very early stage of our new financial year, the more cautious consumer environment and the effect of short term weather impacts, has led to a readjustment of our profit expectations, to protect the Group’s longer term investments," he explained.

He said the outlook for the rest of the year remained challenging. "In common with many UK retailers, the year ahead looks like being a very challenging one and we have taken action early to be sure we protect the underlying strength of the business. We do believe continued investment is essential to ensure we retain a sustainable point of differentiation and that we leverage our distinct position on the high street,” Brick said.

Moss Bros is due to announce its figures for the year-ending January 2018 on 27 March. The group said that previously announced expectations for those figures would not change.

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