Moss Bros updates the market and issues profit warning due to Coronavirus outbreak
Menswear retailer, Moss Bros has warned that wide-spread cancellations of events and working from home due to the COVID-19 Coronavirus outbreak will have a significant negative impact on its business this year.
The retailer announced that it has been monitoring a number of segments, including High Street, Factory Outlets, Online and Hire business for any signs of financial impact resulting from the epidemic and has noticed a number of major signs in the past week.
Moss Bros said: “The initial impact was relatively benign, over the last week we have seen a significant reduction in footfall across our retail outlets and in orders in our Hire business. As such, the group has taken the decision to temporarily close all its stores until further notice. The group recognises that COVID-19 could result in a sharper decline in trading performance if mass gatherings (such as Ascot) are voluntarily cancelled or prohibited."
The Coronavirus outbreak has lead to more men working remotely and events such as Ascot, weddings and other gatherings being cancelled. As a result the menswear brand has taken into consideration that fewer men will be buying suits in the future.
In response to this, Moss Bros said it expects that the Coronavirus will lead to "a significant reduction in revenue and profitability" for the year ending 30 January.
However, the menswear retailer highlighted that it believes it has the ability to withstand large revenue declines in the coming months as the business is currently debt-free and has sufficient cash flow. Moss Bross further added that it is taking all necessary action to manage the business and protect its profitability.
Moss Bros added: “Over the longer term, the board remains confident in the strategy and believes the group is well positioned to benefit from the normalisation and growth of the UK retail market.”
Recently, the menswear brand announced it will be sold to the owner of Crew Clothing , Brigadier Acquisition Company, in a deal worth £22.6 million.
Moss Bros was founded in 1851 and has sites across the UK, but recently posted widening losses amid a tough retail environment on the UK high street.