Moss Bros like-for-likes up 5.7% as profits stabilise

The formal menswear specialist recorded a pre-tax profit of £2.2m in the first half to July 28, marginally up on the £2.16m made in the same period last year. EBITDA rose from £4.2m last year to £4.3m.

Moss Bros said it had been negatively impacted by the Olympics as like-for-like sales had slowed in the seven weeks to September 15, although they remained positive.

Sales in its retail division rose from £40.9m in the first half last year to £43.1m this year. Retail gross profit edged up from £22.9m to £23.2m.

However, the retailer said it invested in margin, absorbing an increase in raw material costs to report a 2.2% fall in gross margin to 60.4%. However, Moss Bros said that input costs have now stabilised due to the introduction of direct sourcing, and that margin is set to improve in the second half.

Moss Bros said it had “successfully adapted” its operations to cope with the Olympic Games, including introducing night deliveries to central London stores. 

The impact on profit from the Games is expected to be “neutral” overall. However, its suit hire business experienced a deferral of wedding bookings from the first half into the second half, the retailer said.  

Moss Bros is undergoing a refresh of its store estate. After trialling a new-look store last year, it will invest £11m to refit 90 of its 136 stores over the next five years. The retailer said that results from the four trial stores had been “encouraging”.

It will launch a new retail website before Christmas, a transactional hire website in the first quarter of 2013 and has introduced click-and-collect into 12 shops.

Moss Bros is also considering selling its product through third-party websites.

Moss Bross chief executive Brian Brick said: “These results reflect another period of progress for the company. The group has traded well across both hire and retail in the first six months of the year.    

“The early response to the autumn/winter range is positive, with like-for-like sales continuing to improve year on year and gross margins are showing an improving trend against the prior year.”

He added: “Despite challenging economic conditions, the group’s trading performance continues positively, in line with the board’s expectations and the business is well placed to make further progress during the second half.”