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Moss Bros profits grow despite decline of hire business

Menswear group Moss Bros saw its pre-tax profits grow 9% to £4.8m in the year to January 31, as an increase in retail sales offset a dip in its suit hire business.

Group like-for-like sales were up 5.5% to £126m. Broken down, like-for-like retail sales were up 7.1%, while like-for-like hire sales were down 3.6%. Ecommerce sales increased by 58.9% during the year, and now make up 7.8% of the total.

EBITDA was up 5.4% to £9.7m, driven by the growth in sales and tight cost control. However, gross margin fell by 70 basis points as the hire side of the business – which has a higher margin – made up a smaller proportion of sales following “a difficult two years”.

Moss Bros said it had a strong cash balance of £19.6m following ongoing investment in its store refit programme and earlier intake of new season stock. It refitted 14 stores during the period.

Highlights during the year included the successful launch of sub-brands Moss London, Moss 1851 and Moss Esq. in autumn 2014.

Group like-for-like sales in the first seven weeks of the new financial year are up 7.5%.

Moss Bros chief executive Brian Brick said: “We continue to make good progress in the delivery of our strategic priorities. The modernisation of the store portfolio is achieving the anticipated returns and we have exciting plans for the implementation of our multichannel shopping environment.

“The adoption of the master brand ‘Moss Bros’ and launch of our sub-brands in autumn 2014 have improved the resonance the brand has with current and potential customers of all age groups.

“The early response to the 2015 spring/summer retail range is positive and retail like-for-like sales are continuing to improve year on year. Hire is showing signs of recovery and we are well placed to maximise revenues in 2015 following a difficult two years for wedding related hire.

“Although the external market continues to be fragile, the business is on track to achieve market expectations in 2015/16.”

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