If nothing else, and whoever ends up owning the retailer, Baugur’s pounce will force some hard thinking about what Moss Bros stands for and how it can be made to work.
For almost 10 years Moss Bros has been up and down like the lifts at Harrods. The dress-down days of the dot-com boom brought a flight from formalwear, while when M&S was on its uppers Moss was an obvious alternative for a suit.
But there have been as many troughs as peaks. Despite modernisation attempts, Moss often gives the impression of being a business whose time has gone.
That makes Baugur’s willingness to stump up hard cash all the more surprising. OK, the valuation is way below Moss Bros’s year high of almost 76p a share but Baugur has enough on its plate, such as its stakes in underperforming quoted retailers and problems at some of its own store businesses, to have steered clear of a problematic deal unless it had some good ideas to create value.
One explanation for Baugur’s interest may be Moss’s exclusive deals with brands such as Hugo Boss. Control over such labels would fit well with other Baugur operations, most notably House of Fraser, which is being remodelled as an upscale department store group.
If Baugur’s bid fails, the onus will be on Moss Bros’s founding families – who oppose a sale – to come up with a convincing way forward. Their attachment to the business, more than a century old, is understandable. But they have shown no sign in recent years that they really know how to sustain it for another hundred.
Retail woes reflected in City
If retailers want to know just how low their stock is in the City, there is a clear sign behind the walls of the big banks.
Broking firms have been pruning back their teams of retail analysts as the stores sector’s appeal has dimmed.
Merrill Lynch is the latest bank likely to scale back its sector coverage. It is consulting with members of its well-regarded retail analysts team about their future.
In the wake of the credit crunch, banks have problems of their own. But job cuts are a sign that the retail sector’s performance is not expected to improve soon and, unfortunately, other market sectors are seen as more important.
George MacDonald is deputy editor of Retail Week