Menswear chain Moss Bros has announced the sale of its 15 Hugo Boss stores in a move ending a 16-year franchise deal with the fashion giant.
Moss Bros will sell the outlets back to Hugo Boss for £16.5 million, helping finance turnaround plans for its core business.
The group, which has 155 stores in the UK and Ireland, added that ongoing cost cutting efforts were paying off as it confirmed second half trading held up well despite the pre-Christmas snow disruption.
Like-for-like sales rose 7% in the 26 weeks to January 29 – a slight slowdown on the 8.3% reported in early December.
Moss Bros said it wants to use the Hugo Boss money to revamp core stores and finance new initiatives, such as the roll out of its Moss Bespoke tailoring service.
It will also invest cash in its online offering and said the deal will mean it can operate debt free.
Moss Bros, which also trades as Savoy Taylors Guild and Cecil Gee, has operated Hugo Boss stores under franchise since 1995.
But it said it will continue to maintain a wholesale relationship with Hugo Boss after the stores sale and stock the label in certain Moss Bros and Cecil Gee stores.
Brian Brick, chief executive of Moss Bros, said: “This is a transformational deal for Moss Bros and absolutely in line with our recently developed strategy of focusing on growing our own brands.
“Having restored the quality of the product offering of the core Moss Bros business and established a strong momentum in positive like-for-like sales, 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.”