Moss Bros e-tail rises, sales strong but hire business struggles
Moss Bros continued to prosper in the first half, despite the tough UK fashion retail sector, with the 26 weeks to July 29 showing total group revenue, excluding VAT, up 4.3% to £66.6 million and comparable sales up 2.8%.
Those figures may not be spectacular but in the current environment, they’re the kind of rises that some of its peers would envy and they came as the firm said “retail sales growth, including e-commerce, continues to underpin the positive performance.”
In fact, while overall comparable revenue rose less than 3%, comparable retail sales (including e-tail) were up a much more pleasing 5.1%. And overall e-tail turnover rose 14.5% in the first half with the channel now accounting for 11.2% of total sales.
Clearly though, not all parts of the business are doing so well and it was the suits-for-hire segment for which the firm is so well known that suffered. Hire sales account for 12.8% of total sales but were down 8.4% on a cash-taken basis during the half.
Still, it all fed through to a healthy operating profit rise of 16.6% to £4.2 million while pre-tax profit was up 15.7% to £4.2 million.
And there was more good news on the retail gross margin, which was up 0.1% for the half despite the firm having reintroduced a midseason sale in response to a much tougher trading environment during the earlier part of the season. But overall gross margins were down -0.7%, impacted by the hire sales reduction.
The company said the sub brands of Moss London, Moss 1851 and Moss Esquire are now fully established. These sub brands, combining with Savoy Taylors Guild, “have created an authoritative and complementary customer offer across a range of fits and prices, underpinning our expertise in formalwear, under the Moss Bros master brand.”
And its 'Tailor Me' personalisation service launched during 2016 is now available nationwide. This is a simplified set of bespoke options offering a custom made suit, ready for collection within 30 days of placing an order.
The second half appears to have started strongly with retail comparable sales in the first eight weeks to September 23 up 3.5% and while hire sales are still down, the fall is only 4.7% so far. The company said early responses to the autumn/winter 2017 range across Retail are positive.
It also said that its two store pilot in the Middle East have shown “reasonable growth on the year but remain firmly a trial as we seek to refine our approach whilst continuing to enable the potential for further expansion to be evaluated at relatively low risk and cost to the business.”
CEO Brian Brick said of the results and of current trading conditions: "We are pleased with the performance of Moss Bros during the first half in what was a very tough trading environment. We remain acutely aware that market conditions remain tough, with a highly competitive retail landscape set to continue alongside an unpredictable economic backdrop. There are significant cost headwinds, driven by National Living Wage, the Apprenticeship Levy and weaker sterling. We remain agile in our trading approach, whilst continuing to invest wisely in our future growth.”
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