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City professionals are being sacked in huge numbers — and that could be good news for suits specialist Moss Bros.
With thousands facing the dole because of the turmoil in the banking industry, Moss Bros reckons it could get a lift in sales as workers spruce up for interviews or just try to hang on to their current jobs.
The beleaguered firm has had a rough couple of years, torn by internal strife and warring shareholders.
Icelandic investment group Baugur has made two takeover bids, but both failed following arguments with the founding families.
Moss Bros today reported a loss of £1.6 million in the six months to 26 July, but claims the future is bright.
It has added upmarket brands such as Calvin Klein and Hugo Boss to its offering, hoping to lure a younger and more fashionable crowd.
"People will be needing a new suit," chief executive Philip Mountford said today. "We do know that when recessions hit, formalwear sales increase."
Mountford appealed for a period of calm from investors. "Any more distractions would not be good. We need to concentrate on running the business," he said.
Baugur's last bid was at 42p a share. It walked away after Laura Ashley raised its stake to 10%. Today the stock was at 25p, valuing the company at £23.5 million.
Moss Bros is not paying an interim dividend as it seeks to hoard cash. Sales were 3% lower at £61 million for the half year. David Stoddart, retail analyst at Altium Securities, said: "Moss Bros retains a healthy cash position.
"It has the financial strength to outlast the recession and a promising collection of retail brands, each of which has further rollout potential."
He thinks the shares are cheap and has advised clients to buy.
