BusinessCompany NewsProfile: Michael Hitchcock, FD of Moss Bros

Profile: Michael Hitchcock, FD of Moss Bros

To kick-off our fashion special, Moss Bros group FD Michael Hitchcock talks to our reporter about his plans to revive the menswear retailer and cast off its old-fashioned image after a difficult year

WAGs Boutique, a new television reality show, sees two teams of footballers’
wives and girlfriends compete to turn their passion for fashion into a hot
profit. For 13 weeks, the girls swap shelf-browsing for shelf-stacking as they
set up and run two rival fashion boutiques in central London.

On the surface, you might not immediately associate the WAGs with the high
street chain Moss Bros. But Michael Hitchcock, newly-appointed finance chief at
the group, has more in common with the stars of ITV’s reality show than you
might think. In a coup for the menswear retailer, it has unveiled a tie up with
Arsenal football club that saw the team’s players kitted out in Moss Bros’s
finest as the official club suit for last sunday’s Carling cup final – though
the Gunners lost 2-1.

Chartered accountant Hitchcock, who stepped into the role of FD for Moss Bros
Group plc four months ago, is confident the publicity will help to boost the
image of a fashion brand dogged by a tired image that is more Grace Brothers
than footballers’ wives.

In many respects, it’s ironic that the company is using a tie-up with a
football club as a marketing opportunity. In January, Moss Bros blamed the
beautiful game, and more specifically distractions of the World Cup, as one
reason for poor sales in what chief executive Phil Mountford saw as an
‘unusually difficult year’. Hitchcock says the England games cost the group more
than £1m in sales.

Mild autumn weather also contributed to the poor 2006 results, again costing
the business more than £1m in lost sales of overcoats and winter clothing. Then
the group was slapped with an unexpected hike in distribution costs after it was
forced to move out of its warehouse in Stratford, east London, because it was
situated in the Olympic development zone. The move to the new warehouse in
Barking, disrupted eight weeks of trading, Mountford said at the time.

Not even a huge leap in dinner jacket sales on the back of Daniel Craig’s
debut as James Bond was enough to offset the downward trend. Although tuxedo
sales surged 21% in the week of the Casino Royale premiere and remained strong
in the following weeks, overall like-for-like sales fell 1.4% for the 49 weeks
to 6 January 2007, a further drop from the 0.7% fall for the 26 weeks to 12
October 2006. The warning prompted City analysts to reduce the profit forecast
from about £5.3m to £3.5m.

Hitchcock may not have been around long enough to take the flak for Moss
Bros’s lacklustre performance, but nor is he one to dish out too much criticism
of the way the company was run before his arrival.

‘People in the business have been through the eye of a needle. We’ve also put
in place a new IT system – electronic point of sale and stock management. It had
been in development for the past two years and went live at the beginning of
last year at a cost of several million pounds. During that period we had profit
growth – it’s a minor miracle that business was so good when the system was
going in.’

With an impressive resumé boasting senior finance roles with companies
including Guinness, Rank Group and Diageo, Hitchcock admits that it was only
down to the skills of a particularly persistent headhunter that he even
considered a move to bookstore chain Ottakars. ‘I’d worked for some big
organisations – the smallest was probably MFI with a turnover of £2bn. I was a
snob. I didn’t want to be seen to come out of that big plc window,’ he says of
the bookseller.

Hitchcock admits that Ottakars, where he had spent 20 months as FD, was a
hard act to follow. An MBO, a bid by HMV referred to the Competition Commission
resulting in a 24-week investigation and the ensuing £63m acquisition – the
Ottakars experience was, he says, nothing short of a white-knuckle ride.

By the time Hitchcock had stepped into the financial hot seat in October last
year, Moss Bros Group, which also includes the Cecil Gee and Savoy Tailors Guild
chains as well as Hugo Boss franchises, had been without an

FD for 15 months, after Roddy Murray’s departure and a couple of false starts
trying to find a replacement.

Hitchcock suggests the gaping hole in the executive team had repercussions
for the company, but says finding the right person is more important that
rushing to fill a hole. ‘Executive directors need to be so aligned or else
things fall apart,’ he says.

So what qualities did he possess that made him the ideal fit? ‘I’m
enthusiastic and passionate – and I did my research,’ he smiles.

Since joining the retailer, Hitchcock has certainly set out to make his mark
on the business, having taken on responsibility for IT, logistics and the online
business, as well as running the finances of the group. ‘Accountancy isn’t just
about numbers – that’s only 10% of what an FD does today,’ he adds.

But his most pressing business is to address the perception of Moss Bros,
tainted by its

tired image. ‘The name is a massive asset – there’s instant brand
recognition. But Moss Bros is steeped in heritage. Some of the estate is dated
and has been underinvested,’ he explains.

He’s not keen on going down the rebranding route, a strategy he describes as
hugely expensive and very time consuming.

Currently, the company is working on store revamps as part of its strategy
and as the profile of shoppers changes. For the suit hire business, which
generates revenues of around £18m, that means transforming the Moss Bros
experience for the younger, more discerning punter. ‘The average age of a person
getting married today is 32. These days, people want leather sofas, plasma
screens, tea and coffee. That’s one of our strategies going forward.’ Hitchcock

For menswear sales it’s about presenting a more contemporary image, ‘offering
a range of brands at an affordable price. We’re not taking on the Asdas selling
£40 suits’.

Hitchcock is in the process of consolidating the supplier base and looking to
source more stock from China. This will give the group a better buying deal and,
despite reducing the ranges on offer, he claims it will improve the customer
buying experience.

‘Consumers are time-poor – we need to guide them to a brand name or shirt
type and make it a quick and painless process, while at the same time improving
the enjoyment of the customer experience,’ he explains.

There’s a lot to be done, but Hitchcock warns against trying to do too much
too soon, but nor is he shying away from a challenge. ‘When I arrived, I created
a goal hierarchy. It means the business focus is much clearer. I believe if you
hide from the risk, you hide from the reward.’

Hitchcock admits working in fashion has changed the way he dresses, or maybe
he has taken to heart the advice that you should always dress for the job you
want, rather than the one you have. He makes no secret of the fact that he has
an eye (from behind his designer Alain Mikli glasses) on a CEO role.

‘I knew when I was 14 that I wanted to be an accountant. Having fulfilled
that dream, you soon realise that it’s a stepping stone to bigger ambitions.
Ultimately, CEO is what I want to be. At 42, I’m still learning, but I’m nowhere
close to being the finished product.’

Retail trends

Fears that Christmas 2006 would be remembered as the worst for Britain’s
shopkeepers in a quarter of a century proved ill-founded. Data published by the
Office of National Statistics in January showed retail sales surged at their
fastest pace for 18 months and gave the best December reading for three years.

The December data gave a particularly strong showing for household goods
sales and clothes. Fashion retailers and department stores did well, led by
Burberry, Liberty, House of Fraser and the John Lewis Partnership.

But Hitchcock says it’s unfair to single out Moss Bros as bucking the trend
for an upturn in the retail market. ‘We’re the only publicly quoted men’s
retailer – a lot of other companies are part of bigger entities where the
results are less visible.’

The DNS data also highlighted an increasing trend towards online shopping.
Hitchcock is also on a mission to boost what he describes as a ‘miniscule’ part
of the business to one that generates between 5% and 10% of revenues. He’s only
got himself to blame for landing that challenge. ‘I was a tad critical about our
online presence to Philip [Mountford, Moss Bros’s chief executive] so he said
you do it.’

The new-look website is in the early stages of development and should launch
by the end of the year. ‘There’s a real opportunity, where you have a bricks and
clicks capability which allows you to order online and pick up and return to
store.’ He also plans to put the hire side of the business online, with personal
details held in systems, allowing customers to order at 10am for an afternoon
delivery – and not a tape measure in sight.

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