Moss Bros e-tail restarts, says it has the cash to see it through the year
May 12, 2020
Moss Bros updated the market on Tuesday but it didn't have anything to say about its on-off takeover, apart from to say that "it remains in dialogue with the takeover panel”.
Earlier this year, the company had agreed to be taken over by a group including the owner of Crew Clothing. But following the lockdown, the suitor has tried to pull out.
The lack of information was frustrating, but Moss Bros had plenty to say on other subjects. One announcement was that it's now reopening its e-commerce operations after having closed them back in March, operating initially with a reduced workforce.
And it added that based on government guidance issued at the weekend, it's now developing plans to reopen its stores “in an orderly manner” next month.
As for its financial position, it had already said on March 23 that it was free of debt, had cash in the bank and that it could withstand a significant revenue decline through to the beginning of the second half of its financial year.
With that date getting ever closer, it said it has implemented various actions to reduce costs and to conserve cash, and feels it now has the cash to see it through the rest of the year "and beyond".
Its measures include accessing the government's Coronavirus Job Retention Scheme in order to retain employees, pending a resumption of trading. And it’s been implementing significant salary reductions for continuing employees, led by the board, whose members have reduced their salaries and fees by between 60% and 70% during the crisis. That’s a significant percentage given that many other companies have announced cuts of between 20% and 25% for board member fees and salaries.
Unfortunately, it has also had to make redundancies “where necessary and unavoidable”, and it has paused all non-essential capex. It’s been “actively engaging with its suppliers” too, regarding discounts and extended payment terms, “and with its landlords regarding rent holidays and/or deferrals”.
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