Moss Bros reports £4.2m full-year loss
Another high street giant has today revealed a dent in its business, as Moss Bros has suffered a full-year loss for the 52-week period ending 26 January of £4.2m, citing stock shortages, extreme weather, sporting distraction and heavy discounting as the key issues.
The figures compare to a profit of £6.7m the previous year, highlighting a bigger fall in grace for the men’s formalwear specialist, which was founded in 1851. Meanwhile, revenues were down 2.1% to £129m, and like-for-like sales dropped 4.3%.
The full-year figures also show that like-for-like hire sales dropped by 9.3%, but the ray of hope for the future was a 19.6% growth in online sales.
Commenting on the results, Moss Bros CEO, Brian Brick, said:"It has been an extremely challenging year for the business on many fronts, but I am confident that we have made significant progress in a number of areas of the business. However, it is disappointing to be reporting an adjusted loss before tax for the Group for the first time since 2010/11.”
While Moss Bros was able to improve its performance in the second half of the year, Brick said this was in part as a result of adopting “a more aggressive trading stance in reaction to competitor activity.” The retailer saw positive sales momentum during the fourth quarter, but as a consequence of deeper discounting, the gross margin rates which it achieved were lower than anticipated.
“Our e-commerce and our fledgling marketplace businesses performed well throughout the year. ‘Tailor Me’, our bespoke suit offer, continues to grow and brings our tailoring credentials to life in our stores,” added Brick.
Throughout the year Moss Bros opened a small number of new stores and closed marginal stores where appropriate. Investment was focussed on both the physical store environment and new customer acquisition and retention, via its continually improving e-commerce platform.
Looking ahead, Brick commented: “In common with many UK retailers, we continue to anticipate an extremely challenging retail landscape, particularly within our physical stores, as a result of reduced footfall and rising costs. Alongside the macro trend of more retail transactions moving online, we expect the uncertain consumer environment and significant cost headwinds to continue.
“In spite of the challenging backdrop, we have overall, made a good start to the new financial year. The early response to the 2019 Spring/Summer retail range has been positive and the continued progress of our e-commerce channel provides us with the confidence to increase investment in this area.”
Brick also affirmed that Moss Bros remains EBITDA positive and debt free, and the board's decision not to recommend payment of a final dividend has been made in order to offer the business maximum flexibility for investment, whilst “retaining a strong debt free balance sheet."
Trading performance has strengthened overall in the first eight weeks of the new financial year, but remains volatile. Total sales are up 3.6% on last year, driven by growth in e-commerce and wholesale channels and the benefit of no recurrence of last year's stock issues. Retail like-for-like sales including e-commerce, including VAT, in the first 8 weeks of the new financial year are up 3.9%.
E-commerce sales, including VAT, in the first 8 weeks of the year are up 20.1%, demonstrating a continuation of the strong performance seen during 2018/19.
The company recently announced the appointment of Jules CEO Colin Porter as chairman.