Moss Bros, the well-known menswear retailer, has reported a pre-tax loss of £7.4 million for the year ending January, a significant decline compared to the £4.2 million profit it enjoyed the previous year. The company’s sales also took a hit, falling 0.5% to £128.3 million, with like-for-like sales dropping by 1.2%. However, there was a glimmer of hope as the company managed to boost its online sales by 6.5%, which accounted for almost 17% of total revenue.

One area in which Moss Bros struggled was its suit hire business, which saw like-for-like sales decline by over 16%. Although this segment is a smaller part of the company, it has higher profit margins than its retail operations, making it a significant loss for the overall business. The company also reported an EBITDA loss of £5.5 million and an after-tax loss of £8.1 million, a substantial increase from the previous year’s figure of £3.8 million.

Moss Bros was delisted from the London Stock Exchange in June after undergoing a takeover process. While the company claims that Brexit uncertainty did not have a noticeable impact on its operations, it acknowledged that the pandemic had a severe negative effect. To mitigate the effects of the crisis, Moss Bros entered into a company voluntary arrangement to improve its balance sheet and renegotiate lease deals for its stores. It has already renegotiated some leases and plans to exit others that are deemed unviable for trading. The pandemic has left a significant impact on the company’s balance sheet, and it recognizes that it has faced the full force of the crisis.

The cancellation of formal social events and the rise in remote working for office employees have greatly reduced the demand for suits, further impacting Moss Bros’ sales. Even after the company’s stores reopened in June, sales only reached around 50% of pre-pandemic levels by August. In the five weeks leading up to the second national lockdown in November, sales ranged from just 31% to 36% of the previous year’s levels, which the company deemed unsustainable. With the third national lockdown still in effect, Moss Bros does not anticipate a swift return to pre-Covid levels of business.

Despite the limited opportunities for customers to purchase and wear formal clothing, the company has seen growth in its online performance since the pandemic began. By focusing on providing outfits and looks rather than just suits, Moss Bros has experienced significant increases in the average transaction value. However, the company acknowledges that its retail stores are essential to its overall proposition, and its growth will continue to be constrained until these stores can reopen.

Useful links:
1. Moss Bros website
2. BBC News article on Moss Bros’ financial results