Moss Bros hit by casual calamity

MOSS Bros, the ailing menswear chain that successfully beat off takeover interest from Shami Ahmed, suffered heavy losses last year after a botched attempt to muscle in on the casualwear market led to more than £3m of write-offs.

Faced with the trend towards dressing down towards the end of the 1990s, Moss Bros decided it had to move into slacks and T-shirts, rather than concentrate solely on suits and formalwear.

Last year it opened 32 casual stores branded Code but they quickly proved to be a disaster and are already being turned back into the core Moss Bros, Hugo Boss and Cecil Gee fascias.

New chairman Keith Hamill, who joined last June, said: 'The Code store is not a good one. Moss Bros wanted to switch to casualwear but didn't have the skills or resources to do it. By the time the brand got off the ground, people had started to move back into formalwear.'

It was partly the mistakes made on Code that attracted the attentions of entrepreneur Ahmed. But while he has gone away others are thought to be waiting in the wings, including Speciality Retail Group, which owns the Suits You retail chain. Hamill said there were no serious talks ongoing with anybody, but observers said the group would receive a flurry of bid interest.

Part of today's £3.2m write-off was also racked up by the closure of two Brand Centre discount stores. Despite £2.1m of asset sales flattering the bottom line, pre-tax losses widened to £4.9m against a £2.7m loss a year earlier on turnover of £141.3m against £155.2m before.

The sales slide was partly due to the disruption of the business from the Code launch, while 11 September had a huge impact on its big-earning stores in central London.

The 30 London sites had been expected to bankroll the group's Code expansion, but with the terror attacks' impact on sales, there was not enough cashflow to carry on trying to make the format work.

Given the huge turmoil in the business, which has seen some stores change fascia twice in the past year, there are no like-for-like sales figures. But the indications are that its premium stores, primarily Hugo Boss and Cecil Gee, had rallied with a 10% sales increase since the end of the year.

Hamill has assembled a new board structure, with chief executive Adrian Wright joining last month and trading director Philip Mountford joining this month.