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Moss Bros warns on profits as it closes stores due to Covid-19
23rd Mar 2020 09:02
(Sharecast News) - Moss Bros warned on profits on Monday as it announced the closure of its stores amid the Covid-19 outbreak, adding that it would take even more of a hit if Ascot does not go ahead.
The specialist menswear retailer said that while the initial impact of the outbreak was "relatively benign", over the last week there has been a "significant" reduction in footfall across its retail outlets and in hire business orders. As a result, it has decided to close all its stores until further notice.
"The group recognises that COVID-19 could result in a sharper decline in trading performance if mass gatherings (such as Ascot) are voluntarily cancelled or prohibited," it said.
Moss Bros expects the effects of the pandemic to result in a significant reduction in revenue and profitability for the year to 30 January 2021 but said it was too early to determine the precise quantum.
It noted that it is debt free and retains cash in the bank and said it is managing the business to protect profitability and taking "all necessary action" to reduce costs and conserve cash.
"With these actions, the group believes that it has the ability to withstand significant revenue decline through to the beginning of the second half of FY21," it said. "Over the longer term, the board remains confident in the strategy and believes the group is well positioned to benefit from the normalisation and growth of the UK retail market."
At 0900 GMT, the shares were down 1.6% at 19.02p.
The specialist menswear retailer said that while the initial impact of the outbreak was "relatively benign", over the last week there has been a "significant" reduction in footfall across its retail outlets and in hire business orders. As a result, it has decided to close all its stores until further notice.
"The group recognises that COVID-19 could result in a sharper decline in trading performance if mass gatherings (such as Ascot) are voluntarily cancelled or prohibited," it said.
Moss Bros expects the effects of the pandemic to result in a significant reduction in revenue and profitability for the year to 30 January 2021 but said it was too early to determine the precise quantum.
It noted that it is debt free and retains cash in the bank and said it is managing the business to protect profitability and taking "all necessary action" to reduce costs and conserve cash.
"With these actions, the group believes that it has the ability to withstand significant revenue decline through to the beginning of the second half of FY21," it said. "Over the longer term, the board remains confident in the strategy and believes the group is well positioned to benefit from the normalisation and growth of the UK retail market."
At 0900 GMT, the shares were down 1.6% at 19.02p.