Moss Bros on track for profits

Menswear retailer Moss Bros today kept up its recent trading revival by maintaining sales growth despite tough conditions on the high street.

Like-for-like sales were ahead by 9% in the 16 weeks since the start of February, keeping it on track for a return to profit at the half-year stage.

This was in line with market expectations and added to confidence that the London-based group has turned the corner after sliding into the red in 2001.

The owner of the Cecil Gee and Hugo Boss posted interim losses of £1.8m (€2.7m) a year ago, but improved second-half trading helped it report annual profits of £1m (€1.5m) in March.

Chairman Keith Hamill told shareholders attending the group’s annual meeting today that margins have improved and were up 1% on a year ago.

At the heart of Moss Bros’ turnaround strategy has been the disposal of underperforming stores and the clearance of surplus stock.

Changes have also taken place in the boardroom with Philip Mountford taking over as chief executive from Adrian Wright in February.

A refurbishment programme launched in 2003 at ten branches to bring in new ranges is to be extended to a further 30 stores this year.

Rhys Williams, of stockbrokers Seymour Pierce, said sales growth was being driven by a strong performance from the Moss Bros brand and predicted the group would report annual profits of £4m (€6m).

“It is pleasing to see that despite the difficult high street, particularly in April, that Moss Bros has continued to produce strong growth,” he said.

Same-store sales at its chain of Moss Bros outlets were likely to be around 15% ahead of a year ago and was the group’s “biggest growth potential”, Mr Williams added.

Hugo Boss was continuing to perform well but he said sales at Cecil Gee were slightly disappointing and were currently flat year-on-year.

“However, in recent weeks sales have started to build and the management remains confident that Cecil Gee will be up for the first half as a whole,” Mr Williams said.

Shares rose nearly 4% or 2.5p to 72.5p in the wake of the announcement.