Menswear sector may face shake-out, Moss Bros warns
Thursday 08 April 1999
Moss Bros, which owns a string of menswear stores such as Cecil Gee, Blazer and Savoy Taylors Guild, said its outlets at Bluewater were trading extremely well but that sales had fallen at its three stores at Lakeside, the rival shopping mall in Thurrock, Essex.
Rowland Gee, the group's managing director, said: "I was at Bluewater on Easter Friday and it was packed to bursting. I then drove to Lakeside and I could have fired a cannon down the central aisle and not hit anybody."
He warned that the UK retail market was close to saturation and that Britain could see a shake-out in the menswear market similar to the last recession when an estimated 5,000 men's clothing shops closed: "The country has got to the stage now when there are enough shopping centres and factory outlets," Mr Gee said. He added that the impact was already being seen on retail rents even on top shopping thoroughfares like Oxford Street in London where some rents have come down by 25 per cent in six months.
The comments came as Moss Bros reported a dip in full year profits from pounds 19.6m to pounds 16.1m and warned of a tough year ahead. Underlying sales in the first eight weeks of its current year were down by 2 per cent, if new store openings are excluded. Mr Gee commented that the rush to invest in PEPs before the 5 April deadline might have been a factor as consumers deferred other spending.
He said that inflation was likely to stay low and that shoppers would remain cautious. "We are setting our stall out for a tough year," he added.
Moss Bros has been battling against a difficult menswear market as consumers tightened their belts. The company was forced to discount more of its stock and lost a full percentage point of margin in the process.
However, Moss Bros has entered the spring season with a clean stock position. In spite of this, the company managed to increase its share of the suit market from 12 per cent to 13.5 per cent and Mr Gee claimed that the business was on course to grab market leadership from Marks & Spencer by 2000.
The difficulty of the menswear market has taken its toll on Moss Bros' share price which has tumbled from 280p to 180p over the past year. Though the immediate outlook is challenging, the business is well-managed and financially sound. It has pounds 18m of cash and analysts expect an improvement in second-half trading when the millennium factor should provide a boost for Moss Bros' suit hire business.
Though Moss Bros has a major slice of the UK suit market it only has 3.4 per cent of the wider market for menswear and so claims there is plenty of room for growth.
The Blazer chain, acquired from Storehouse in 1996, is making profits and is not up for sale. Acquisitions are possible though the company would not comment on any possible interest in Austin Reed. There are no plans to expand into womenswear, the company said.
Peel Hunt is forecasting profits of pounds 16.5m this year which puts the shares - up 3p to 186.5p yesterday - on a forward multiple of 16. That is about right for now.
- 1 Russell Brand accuses FOX News anchor Sean Hannity of terrorism after aggressive Israel-Gaza debate
- 2 Disney heiress Abigail disowns her share of family profits in West Bank company
- 3 The secret report that helps Israel hide facts
- 4 Israel's propaganda machine is finally starting to misfire
- 5 'Hello mum, this is going to be hard for you to read ...'
Sally Farmiloe dead: Howards' Way actress, and former mistress of Jeffrey Archer, dies aged 60
Russell Brand accuses FOX News anchor Sean Hannity of terrorism after aggressive Israel-Gaza debate
Pope Francis issues top 10 tips for happiness – including don’t try to convert other people
Sabina Altynbekova, the girl branded 'too good looking' for volleyball, says social media obsession with her is a 'bit much'
Justin Bieber posts Instagram photo of Orlando Bloom crying after Ibiza fight 'over Miranda Kerr'
The secret report that helps Israel hide facts
Land for gas: Merkel and Putin discussed secret deal could end Ukraine crisis
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
A day in the life of Vladimir Putin: The dictator in his labyrinth
Putin is 'thuggish, dishonest and reckless', says British ambassador to US
Richard Dawkins tweets: 'Date rape is bad, stranger rape is worse'
- < Previous
- Next >
iJobs Money & Business
£20000 - £24000 per annum: Harrington Starr: A leading provider of web based m...
£28000 - £32000 per annum: Ashdown Group: Secretary (Sales Team Support) - Mat...
Competitive (DOE): Guru Careers: We are looking for an Assistant Management Ac...
£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...