Moss Bros switches focus to retail

moss bros

Clothing hire and retailer Moss Bros (LON: MOSB) is expected to make a small interim loss before the effects of any recent changes in accounting regulations.

The strategy is to increase retail sales as hire revenues dip. Online revenues are expected to grow strongly, and online penetration could rise above 15% for the first time. There should also be like-for-like growth in store sales.

Tailor Me is a growth area and in the first 15 weeks of this year its sales were one-third higher. A standalone website for Tailor Me will be launched, where customers can chose their suit and then go to a shop for measuring.

In contrast, there is likely to be a 15% drop in hire sales in the first half. Wedding hire demand for both morning dress and lounge suits, continues to be weak. This means that there will be lower investment in hire stock.

Full year

Annual revenues are likely to show little growth from last year’s level of £129m and there are upward cost pressures. Another small full year loss of less than £1m is forecast. If costs do not rise as expected, then Moss Bros could breakeven.

The share price has slumped over the past three years or so, but it appears to have stabilised. The share price has been trading at around 20p for nearly six months.

Non-executive chairman Colin Porter bought 509,673 shares at 19.62p a share back in July. The current share price is 19.23p. Positive news is required to spark a recovery in the share price.