Moss Bros update shows progress but there's still work to do
Moss Bros has endured some tough times of late, with a tough trading environment and some self-inflicted problems around stock availability. But ahead of its annual general meeting, the company issued a trading update with a small sales rise on Wednesday, and said its performance continues to improve.
Not that it's out of the woods just yet as that trading environment remains extremely challenging, and the figures it issued still look a little fragile, although they did show strong progress in some key areas.
The update, covering the 15 weeks from January 27 to May 11, said that in spite of the weak backdrop, both full-price retail store sales and e-commerce have delivered “positive progress on last year.” The hire business, which used to be its mainstay but is now a tiny part of its overall revenue, continued to be challenging, “although we believe this reflects a continued switch in occasionwear to the group's retail and Tailor Me offer,” it said.
And after a spate of profit warnings from UK retailers, it was good news that it added the business remains on track to meet market expectations for the year.
Looking back at the most recent period, total sales rose 1.5%, although total like-for-like sales dipped by 0.2%. This compared with the total sales run rate reported in March at the time of its preliminary results announcement of 3.6%, so it has seen sales growth slowing but still positive.
But there was encouraging news from the fact that like-for-like retail sales, including e-commerce, were up 2.2%, “reflecting a strong e-commerce performance alongside positive momentum in high street stores.” Its Outlet store business “was more challenged, especially across the Easter period, when footfall was impacted by the warmer weather.”
And e-commerce sales continued to increase, up 18.7% on last year. E-commerce sales made up 15.5% of the total for the 15 weeks, compared with 13% for the same period last year.
As mentioned though, hire sales are in what seems to be a terminal decline and like-for-like sales here on a 'cash taken' basis dropped 15.6%. As mentioned above, some of this business has switched to retail and specifically the Tailor Me offer, which saw 32% growth in order value.
So what did CEO Brian Brick have to say? “We are making progress on last year, having recovered from the stock issues and improved our supply chain. Retail and e-commerce sales have shown further improvement against this backdrop.
“We are building momentum in new channels to market and we are seeing a growth in new customers as a result. We are focused on the peak phase of our trading year, encompassing wedding season, prom and Ascot. The wider trading environment remains both highly competitive and price sensitive, but we are well placed with our strong core offer and levels of stock availability.”
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