Suit and formal clothing specialist Moss Bros expects an annual pretax loss, while N Brown said its adjusted profit would be below estimates, sending the plus-sized fashion retailer shares plunging by 25%.
“We have seen more intensive discounting from our competitors and a materially lower level of footfall across the high streets and shopping centres of the UK. Despite this, we have resisted discounting pressures,” Moss Bros Chief Executive Brian Brick said in a trading statement.
A Christmas crunch has heaped more pain on British retailers, as changing habits and belt-tightening exposed the industry’s struggle for growth and its slim margin for error.
Many retailers, including some of the biggest names such as department store owner John Lewis Partnership, have struggled to get British shoppers to part with their cash during a year of political instability and worries over Brexit.
Hopes had been lifted ahead of their peak selling season by Prime Minister Boris Johnson’s decisive election victory, but there was no significant bounce back over the Christmas period.
However, Primark, the budget fashion chain owned by Associated British Foods ABF.L, bucked the trend with a 4% rise in UK sales in the 16 weeks to Jan. 4, with a "marginal" fall in like-for-like sales.
Primark said it won market share in a UK clothing sector that struggled for growth in the run-up to Christmas.
This was the case at Moss Bros, which said it expects to report a full-year adjusted pretax loss of about 1 million pounds ($1.3 million) and said that total sales in the 24 weeks to Jan. 11 were down 3% on the same period a year ago. “The year ahead will continue to be challenging until we see an improvement in consumer confidence and a stabilisation in footfall across UK shopping destinations,” it said.
Moss Bros shares were largely unchanged.
N Brown, which has shut shops to focus on online sales, also said it had been hit by a poor performance at its financial services unit, with its shares falling 25% by 1035 GMT.
It said its financial year 2020 adjusted pretax profit would be between 70 million pounds and 72 million pounds ($91 million to $94 million), lower than consensus estimates of between 78 million pounds and 84.1 million pounds. Moss Bros, which in March reported its first annual adjusted pretax loss since 2011, said it has seen “more intensive” discounting from its competitors and fewer shoppers.
“N Brown is also reporting a highly promotional UK market, (-50% to -70% discounts) with not much downtime between Black Friday and Christmas offers for many,” Jefferies analysts said.
While N Brown’s digital revenue rose 2.5% in the 18 weeks to Jan. 4, its total product revenue fell .
However, the company reported higher online sales of party tops, athleisure, and occasion wear.
Reporting by Noor Zainab Hussain, Rishika Chatterjee and Aniruddha Ghosh in Bengaluru; Editing by Bernard Orr and Alexander Smith
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