Moss Bros issues profits warning

Menswear retailer Moss Bros has issued a profits warning. It said a “stock shortfall across all categories has had a negative effect on sales in all retail channels and will continue to do so until late Spring”.

The company revealed plans to consolidate is supplier base in September of last year saying: “Our product supply relationships, prices and routes are continually reviewed and we have undertaken a further consolidation of our supply base for Spring/Summer 2018 product.”

However, in a trading update on 21st March, it said: “Following a review of projections for the year ending 26 January 2019, the Board now anticipates that the Group will deliver profit at a level materially lower than current market expectations.

“The change in current expectations reflects the following main drivers: Following the consolidation of the group’s supplier base in response to sterling weakness, there have been material short-term issues with the resulting availability of stock.”

Moss Bros Chief executive Brian Brick said: “The beginning of the year has been hampered by short term stock delivery issues caused by the consolidation of our supplier base.

“The resulting stock shortage has undoubtedly driven a significant shortfall in sales, which will continue until late Spring. Although this has been a painful experience, I am confident that the availability issues are well on track to being resolved and the margin benefits from the consolidation will flow through.

“This stock shortage, has led to a disappointing start to the year and while we are still at a very early stage of our new financial year, the more cautious consumer environment and the effect of short term weather impacts, has led to a readjustment of our profit expectations, to protect the Group’s longer term investments.

The Moss Bros CEO concluded, “In common with many UK retailers, the year ahead looks like being a very challenging one and we have taken action early to be sure we protect the underlying strength of the business. We do believe continued investment is essential to ensure we retain a sustainable point of differentiation and that we leverage our distinct position on the high street,” he said.