Moss Bros is turning its focus to own brand stores

Moss Bros is turning its focus to own brand stores

Suit retailer Moss Bros is to dispose of its 15 Hugo Boss franchised stores to Hugo Boss UK Limited for GBP16.5m (US$26.6m).

Hugo Boss will acquire the business and assets as a going concern, with completion of the disposal to take place on 1 April 2011, subject to shareholder approval.

Moss Bros said the transaction was integral to its strategy to focus growth and resources on the company's own brands

Moss Bros also confirmed today (7 February) that its like-for-like sales were up 7.0% for the 26 weeks to 29 January 2011, and up 9.1% for the 52 weeks to 29 January 2011.

It continues a recent uptick in Moss Bros' performance, after narrowing losses in the first half of its financial year.

"This is a transformational deal for Moss Bros and absolutely in line with our recently developed strategy of focusing on growing our own brands," said Brian Brick, chief executive officer of Moss Bros. "Although we are ever mindful of the fragile trading conditions in the UK, we have a great product offering, a focused business model and, following the disposal, will have the financial flexibility to leverage the attractive niche which we have as the UK's number 1 branded suit specialist."

Moss Bros will continue to sell Hugo Boss branded clothing through its Moss and Cecil Gee fascias.

Claus-Dietrich Lahrs, CEO and chairman of the managing board at Hugo Boss, said: "This transaction works well for both of our companies. The acquisition is a central component of our global growth strategy and at the same time allows Moss Bros to focus its investment on its own brands."

Meanwhile, market analysts Verdict said that the sale was a "very good move for Moss Bros".

Maureen Hinton, practice leader at Verdict, told just-style: "For Hugo Boss it gives greater control over its brand – a strategy many luxury brands have been pursuing for some time, with very positive results."