Suits us, sir. Moss Bros sells Hugo Boss stores for £16m

The suit retailer Moss Bros hailed as "transformational" yesterday the decision to sell its 15 Hugo Boss franchise stores to the German clothing giant's UK business for £16.5m.

The British company, which operates the Moss, Savoy Taylors Guild and Cecil Gee shops, as well as its eponymous suit-hire business, said the proceeds from the deal would give it "sufficient working capital such that it will not need to renew its current banking facilities and will operate debt-free".

Moss Bros's Hugo Boss franchise made an operating profit of £700,000 for the year to 30 January. After a strategic review, the decision to sell the Hugo Boss franchise will allow it to focus on its core business, notably investing in the Moss brand and redeveloping the Moss-branded stores.

Brian Brick, the chief executive, said the deal was extremely significant, adding: "It is the transformation of the business. You only know how far you have come when you look in the rear-view mirror."

Maureen Hinton, the practice leader at Verdict, the retail consultancy, said: "This is a very good move for Moss Bros."

Despite the heavy snowfall in December, Moss Bros said its like-for-like sales for the 26 weeks to 29 January had jumped by 7 per cent.