Coronavirus: Card Factory, Moss Bross, N Brown and Watches of Switzerland warn of sales hit

Moss Bros issued a profit warning, saying coronavirus would result in “a significant reduction in revenue and profitability” for the fiscal year ending January 30, 2021.

But the retailer said it was “too early to determine” how much its top and bottom lines would be impacted.

Moss Bros revealed this morning that it has taken the decision to temporarily close all of its stores until further notice, adding to a growing list of businesses that have shut up shop on the high street.

The formal menswear specialist said coronavirus could “result in a sharper decline in trading performance” if big events such as Royal Ascot were cancelled or prohibited by the government.

Watches of Switzerland also said sales would be hit and now expects total revenue for the year to April 26 to be in the range of £809m to £812m.

Prior to the pandemic, analysts had expected the company to deliver sales of £891m.

Watches of Switzerland said it had been trading well prior to the coronavirus outbreak. In the seven weeks to March 15, like for likes jumped 12% year on year and group sales spiked 16.8%.

But the business shuttered its US stores on March 19 and took similar action in the UK this morning. It said it expects store closures to continue into its new financial year, which starts on April 27.

To offset lost store sales, it has taken steps to strip out discretionary expenditure, reduce working capital and delay any capital-intensive projects.

Watches of Switzerland boss Brian Duffy said: “Our priority is the health and wellbeing of our colleagues and customers during these unprecedented times. We are taking the necessary steps to mitigate and minimise the impact of this crisis on our business.

“We remain confident in the strong fundamentals that underpin the luxury watch category including its great value preservation. Demand remains strong and we anticipate that this will be the case when the market returns to more normal conditions.”

N Brown also warned on profits, admitting that adjusted profit before tax would be lower than the previously guided range of £70m to £72m.

It cautioned that in the worst-case scenario it has mapped out for coronavirus, involving “significant and sustained reduction in customer demand”, it would need to amend its existing banking covenants and secure additional funding.

However, N Brown added it had “no way of predicting” what impact coronavirus would have on its sales or the impact it would have on consumer behaviour.

In the last week, the business said it had suffered “a very significant and sudden reduction in demand” with daily sales plunging more than 40%. It cautioned that it expected “a material reduction in demand” to persist throughout its 2020/21 fiscal year.

N Brown has scrapped dividend payments “for the foreseeable future” as part of a raft of cost-cutting measures, which also include stopping purchases of new stock, reducing marketing spend and freezing all recruitment.

Card Factory said it registered a “satisfactory start” to its financial year, but admitted “a very material drop” in footfall to its stores would impact the business. It stopped short of offering any sales or profit guidance.

The retailer has not yet closed its stores, but cautioned it would “begin selectively closing stores shortly on a temporary basis”.

Card Factory has identified “significant reductions” in non-essential capital expenditure and delayed the opening of seven new stores until the second half of the year.

It is also in discussions with landlords to further trim its short-term outgoings.