Suit specialist Moss Bros has sold its 15 Hugo Boss franchised shops back to the German fashion label for £16.5m in cash.
Moss Bros confirmed that it will return the Hugo Boss business and branches to the fashion house on 1 April so that it can focus on its own brands.
The disposal will allow the group to fund the redevelopment of Moss-branded stores and pilot initiatives, such as its Moss Bespoke tailoring service.
Moss Bros said the sale of the stores will give it increased financial flexibility and provide it with sufficient working capital to operate debt-free, without renewing its banking facilities.
Completion of the disposal is conditional upon shareholder approval at a general meeting, which is expected to be held by the end of February.
Moss Bros’ like-for-like sales were up 7% for the 26 weeks to 29 January 2011, and up 9.1% for the 52 weeks to 29 January 2011.
Brian Brick, chief executive of Moss Bros, said: “This transaction will give us the opportunity to focus exclusively on investing and developing the brands which we own, from a position of operational and financial strength.”
Claus-Dietrich Lahrs, chief executive of 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.”
annabel.dixon@estatesgazette.com
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