Moss Bros said today that its men’s formalwear hire and retail business was particularly badly hit by this summer’s combination of hot weather and the World Cup – and that full-year profits were likely to be below expectations.
In-store visits were hit hard by the double whammy of good weather and footballing success and dropped by an average of 7%, year-on-year, in the second quarter of its financial year, to July 28, and by 14% in its worst affected stores. Ecommerce sales and those through third-party marketplaces were less badly affected, with online sales 9.5% ahead of the same time last year, representing 12.7% of total sales. That’s up from 11.2% a year ago. Moss Bros put the success down to targeted promotional activity with “increasingly personalised offers”. Work on its new customer and reactivation programmes led to an increase in customer numbers. Four in 10 (42%) online visits came from mobile devices.
Overall, like-for-like retail sales, including ecommerce, were 6.9% down on last time.
The hot weather hit soon after Moss Bros had resolved problems with stock that were a factor in the first quarter of the year. The retailer, rated Top100 in IRUK Top500 research, has reported first half sales of £64.5m, 3.3% less than at the same time last year. At the bottom line, it reported a pre-tax loss of £1.7m after one-off costs of £2m. These include writing down the value of stores and the costs of reorganisation.
It said things were now looking up, with ecommerce sales up by 23.2% in the first seven weeks of the second half, and good availability of its well-received autumn/winter range. However formalwear hire was 13.3% down in that time, reflecting, said Moss Bros, “the anticipated switch to less formal wedding attire.”
It is now investing in both its products and range, and on developing its online service, while also expanding into new marketplaces.
Moss Bros chief executive Brian Brick said the first half had been “one of the most volatile for many years”. He added: “We initially saw sales performance recover well following our previously highlighted early season stock shortages, and sales were generally ahead of expectation.
“This came to an abrupt end when high street footfall dropped dramatically, impacted by the protracted and unplanned period of extremely hot weather and the widespread distraction of England’s success in the World Cup. Although all retailers were impacted in some way, menswear was specifically impacted negatively by the combination and longevity of these two external factors.”
It said that it had taken the decision in a “highly competitive retail landscape” to invest rather than go after short-term profits through cost-cutting. As a result, full-year profits would be lower than expectations.