Moss Bros wipes out dividend as it swings to a loss after ‘extremely challenging’ year
Historic men’s tailoring firm Moss Bros moved into the red this morning, blaming a turbulent trading environment for its first losses in almost a decade.
Shares tumbled more than five per cent in early morning trading.
Read more: Joules boss Colin Porter to take on role as Moss Bros chairman
In its preliminary results for the year ending 26 January, the group said that adjusted losses before tax were £0.4m, swinging from pre-tax profits of £6.7m in the previous 12 months.
The group also revealed that it would not make its final dividend payment, cutting its total dividend from 4p last year to 1.5p.
Meanwhile, total group revenue excluding VAT slipped 2.1 per cent to £129m.
Like-for-like retail sales, including e-commerce, also tumbled 3.6 per cent, despite rising 2.9 per cent a year earlier.
Why it's interesting?
Will the appointment of retail veteran Colin Porter as chairman be enough to save Moss Bros?
Last week investors seemed to cheer the move, with shares jumping after the firm announced that the Joules chief executive was set to join.
But three profit warnings last year leaves big questions hanging over the fashion firm, and today’s preliminary results show the extent of the retailer’s woes on the high street.
With discounts from rivals and shoppers holding back on spending, the firm has quite some job on its hands to move back into the black.
“Porter’s main challenge will be restructuring Moss Bros to offer a multi-channel experience so that it delivers quickly and it is recognised alongside the likes of Next for accessible fashion,” said Julie Palmer, a partner at Begbies Traynor.
She added: “Will he also bring some of the flair of polka-dot wellies and brightly coloured raincoats from former company Joules? Is a complete change of direction on the cards? Whatever it does next Moss Bros needs to recover its recent loss of custom before the retailer starts to come apart at the seams.”
What Moss Bros said
Chief executive Brian Brick said: "It has been an extremely challenging year for the business on many fronts, but I am confident that we have made significant progress in a number of areas of the business. However, it is disappointing to be reporting an adjusted loss before tax for the group for the first time since 2010/11.
"As previously reported, we suffered from a combination of a significant stock shortage and extremes of weather, alongside sporting distraction in the first half, which impacted footfall into our stores.
"Whilst we were able to improve our performance in the second half of the year, this was in part as a result of adopting a more aggressive trading stance in reaction to competitor activity. We saw positive sales momentum during the fourth quarter, but as a consequence of deeper discounting, the gross margin rates which we achieved were lower than planned."