Moss Bros has reported a -6.1% drop in pre-tax profits to £6.7m on sales up 3% at £131.8m in 2017 and said it experienced tough trading towards the end of the year, in part down to its own self-inflicted stock shortages.
The menswear retailer said it had got off to a good start in 2017 but had experienced weak footfall in December and had hampered its own performance due to a shortage of stock as a result of a consolidation of its supply base, which was taken due to the fall in the value of sterling after the Brexit vote.
These stock shortages continue to dog the retailer’s performance in the first quarter of 2018 (retail like-for-like sales including e-commerce and VAT in the first 8 weeks of the new financial year are down -6.7%) and the business was obliged to issue a profit warning earlier this month as a result. However the issues will be dealt with this Spring and the benefits should begin to filter through to the business later in the year.
Like-for-like retail sales, including e-commerce, for 2017 were up 2.9%, while like-for-like hire sales were down -6.2%. E-commerce sales including VAT were up 13.5% and now account for 12% of total sales, with mobile and table now accounting for almost half (48%) of all e-commerce sales.
“It is frustrating that after a strong first half performance, which continued into the third quarter of the year, the final quarter’s performance was below the level we had forecast,” said CEO Brian Brick.
“We suffered from a significant stock shortage, due to the poor implementation of the project to consolidate suppliers. We left ourselves with too little ‘running line’ stock to close out the year having bought cautiously for the second half of 2017. This has continued to hamper our performance into the start of the year.
“In spite of this issue, we have continued to progress the modernisation of the store portfolio, which is nearing completion and develop our omni-channel shopping proposition, including a better level of customer segmentation,” Brick added.
He said that the business was planning for tough trading conditions in 2018 “not least because of the uncertain consumer environment and significant cost headwinds. However, there is no question that we have hampered our own position through the stock shortages and as this gets back on track, our strong consumer proposition is restoring momentum. We will ensure that we continue to invest in this proposition to protect our position.”