Moss Bros boss Brian Brick has hailed the decision to sell its 15 Hugo Boss franchise stores to Hugo Boss UK for £16.5m as a “transformational” moment for the group.
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The menswear retailer will spend the cash on driving its own-brand operations, which include the Moss, Moss Bespoke, Cecil Gee and Savoy Taylor’s Guild chains.
Following a strategic review, Moss Bros will focus on its core Moss chain, online operations and invest in product, stores and service. As part of the strategy, Brick will open a new-look Moss store incorporating all the elements of its offer in May as part of a rebranding. The details are yet to be confirmed.
Brick said the Hugo Boss deal put Moss Bros in a “strong position and makes the balance sheet strong”.
The Hugo Boss franchise, which Moss Bros has held since 1995, made an operating profit of £700,000 for the year to January 30.
Altium analyst Philip Dorgan said: “Management has done a good job in revitalising its product offer and hence its sales. The funds raised in this transaction allow accelerated investment in its own brands and enable it to exploit its niche. While the loss of Hugo Boss profits means a return to break-even has been pushed back one year… in the long run the transaction simplifies Moss Bros’ business model, means it will operate debt-free and should improve the quality, quantity and visibility of earnings.”
Moss Bros reported like-for-like sales up 7% in the 26 weeks to January 29.