Rising store sales and online growth helped revenues at men’s tailoring retailer Moss Bros to edge up 1.4% to £65.4m for the 26 weeks to 27 July 2019. However, losses grew and margins took a hit.
Like-for-like retail sales were up by 2.9%. Store sales were up by 0.6% and online sales grew 20% compared with the same period last year. These now make up 15% of total sales.
Moss Bros’ hire business, which makes up 10.7% of total sales, was down by 14.7% for the period.
As was the case at retailers including John Lewis, JD Sports and French Connection, the new IFRS 16 property reporting standards also took their toll on Moss Bros’ profitability for the period. Losses before tax rose to £2.7m – up from a loss of £1.7m in the same period last year, and Moss Bros said the new standards meant that profits took a £1.1m hit.
EBITDA was £11.4m for the first half after the IFRS 16 impact. Before IFRS 16 impact, EBITDA was £3.1m, down from £3.6m in the same period last year.
Gross margins also took a knock for the period, down 0.7% to 55.8% compared with the same period last year, as they were affected by the shifting channel mix in the business.
Despite some signs of positive growth in the business, the Moss Bros has not recommended a dividend payment for the period.
CEO Brian Brick said that the retailer was working closely with landlords to balance rents: “It feels that we are gaining traction in a number of areas. The return to growth of our stores is extremely important to us and we will continue to focus on maintaining this trend. The growth which we have seen in stores is set against a backdrop of lower footfall in our stores than last year in most locations in which we operate.
“Our conversations with our landlords are active and ongoing to ensure that we can align our store occupancy costs with the lower footfall that we experience, while continuing to offer store-centric services.”
Following on from the results announcement, Moss Bros also announced the launch of its first environmentally friendly suit, the “eco-suit” (pictured above). It is made using a polyester-blend cloth made from recycled plastic bottles. The suit also features corozo nut “plant ivory” buttons and will be sold in eco-friendly bags.