Moss Bros profits jump amid store and online investment

Moss Bros has posted surging full-year profits as investments in ecommerce and store refits bore fruit.

The formal menswear specialist enjoyed a 20.3% jump in pre-tax profit before exceptional items to £7.1m in the year to January 28.

EBITDA advanced 8.8% to £13.6m, driven by more targeted discounting, tight control of costs and improved sales.

Retail like-for-likes climbed 6% across the year, while like-for-like hire sales – representing 13.7% of group revenues – were up 1.5%.

Moss Bros recorded group sales of £131.5m including VAT, up 5.3% on a like-for-like basis.

Online sales soared 15.7% and now account for 11% of total sales.

The retailer hailed “strong” growth of mobile and tablet sales, which now account for almost half its ecommerce business.

Moss Bros said its gross margin improved 1.5% to 61.3% during the year, driven by lower levels of discounting.

It added that “ongoing investment in a strong brand identity and store refit programme” reaped rewards during the year, while “back-end” infrastructure improvements helped the business grow online.

Moss Bros chief executive Brian Brick said he was “very pleased” with the retailer’s performance.

He added: “The modernisation of the store portfolio is nearing completion and continues to achieve anticipated returns.

“We have made a good start to the implementation of our omnichannel shopping proposition and will ensure that the appropriate investments are made in both our systems and our people during 2017 and beyond, to leverage the benefits of this important area.

“We continue to add to the capabilities of the management team and we are well placed to accelerate our growth, in spite of continuing tough market conditions and the ongoing headwinds which we face as a result of increasing input costs in many areas.”

Current trading

Moss Bros said it had continued to trade “in-line with expectations” since the start of its current financial year.

Retail like-for-likes, including VAT, were up 4.3% in the first seven weeks of the year.

However, hire orders booked for collection are down 1% year-on-year.

Moss Bros said this was skewed by Easter, which marks the start of the wedding season, falling three weeks later in 2017.

Like-for-like hire sales on a “cash taken” basis were down 14.3% in the first seven weeks of the year.

Moss Bros said the introduction of its £10 deposit offer impacted like-for-like revenues because it was “holding a materially smaller value of deposits” compared to last year.

Read the full article here