Moss Bros today warned on profits for its new financial year following early stock problems and as fewer customers head in store. But it said that investment, including in ecommerce, remained a priority.
The formalwear hire and retail business, a Top100 retailer in IRUK Top500 research, said that its move to rationalise its supplier base following the ongoing weakness of sterling had meant "material" stock shortfalls across all of its categories. This, it said, had hit retail sales across all its channels and would do so until late spring. Hire sales were also challenging, it said, although the peak hire period had not yet started.
At the same time, it was also seeing visitor numbers remain low in stores, following a trend that started in December, and reflecting "a more cautious consumer environment". Profits would be hit in the year to January 2019, although expectations for profits in its latest year remained unchanged.
Despite this setback, said Moss Bros, it was important to keep investing in "key areas of future growth, most notably our ecommerce business, our product development, the customer experience and our Tailor Me proposition, which remains on plan".
Chief executive Brian Brick said: "The beginning of the year has been hampered by short-term stock delivery issues caused by the consolidation of our supplier base. The resulting stock shortage has undoubtedly driven a significant shortfall in sales, which will continue until late spring. Although this has been a painful experience, I am confident that the availability issues are well on track to being resolved and the margin benefits from the consolidation will flow through.
"This stock shortage, has led to a disappointing start to the year and whilst we are still at a very early stage of our new financial year, the more cautious consumer environment and the effect of short term weather impacts, has led to a readjustment of our profit expectations, to protect the Group’s longer term investments.
"In common with many UK retailers, the year ahead looks like being a very challenging one and we have taken action early to be sure we protect the underlying strength of the business. We do believe continued investment is essential to ensure we retain a sustainable point of differentiation and that we leverage our distinct position on the high street."