Icelandic investment group, Baugur, may be preparing a bid for Moss Bros Group, a suit retailer in the UK suffering from financial problems.
The bid, which may be for as much as £40 million, could come as early as next week. Through Unity Investments, Baugur already owns 29 per cent of Moss Bros. In addition, Baugur owns several high street brands in the UK including the House of Fraser and Hamleys toy store.
Moss Bros has over 150 stores in the UK which hire and sell suits. Last week the company announced that it would be cutting its supplier base and may be letting staff go. When the company admitted that it was unlikely to meet this year’s profit targets, share prices dropped further. At the end of last week Moss Bros stock had fallen 50 per cent during the year, cutting the company’s market value to GBP 35 million ($71.6 million).
According to Philip Mountford, the chief executive of Moss Bros, fears of an economic slowdown have curbed men’s spending. “The first spend to go is always the male spend,” he said. “I’m very close to a number of people in the industry and, from what I hear, a lot of others have been struggling as well.”
In contrast, the Baugur Group has been rapidly expanding in the last few years. By the end of 2003, the company was the most internationally diverse Icelandic company as well as the largest privately owned group in the country.