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Moss Bros profits margin dips following autumn promotions

Like-for-like sales at Moss Bross were up 7.8% in the 19 weeks to December 6, but gross margin was down 180 basis points as the menswear group ran promotions to drive sales during the unseasonably warm autumn.

The dip in gross margins was also attributed to the fact that hire sales now account for a smaller proportion of total sales. The menswear company said the gross margin performance for the full year would depend on the level of discounting in the final six weeks of the financial year.

For the 45-week period, like-for-like sales were 7% ahead of last year, while total sales were up 5.6%. Moss Bros said trading was in line with market expectations.

Retail sales, which make up 85% of group revenue, benefited from the new sub-brands launched for autumn 14 – Moss London, Moss 1851 and Moss Esquire – as well as the ongoing store refit programme. Fourteen stores have been refitted in the year to date.

Two stores were opened and four closed, bringing the total to 131.

Online sales were up 81% on last year in the 45 weeks to December 6. Ecommerce now comprises 7.4% of group revenue.

Chief executive Brian Brick said:  “We are encouraged by the trading momentum throughout the business as we enter the important Christmas trading period. Hire evening wear has shown growth on the prior year and, although there has been some weakness in retail demand due to the warmer weather conditions, we have offset this with selective promotional activity and close control over costs.

“We continue to develop the business by leveraging the strength of our brands and our operational capabilities. The board remains confident in the outlook for the full year.”

The group will announce its preliminary results on March 25, 2015.

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