Moss Bros may suit Baugur

Baugur, the Icelandic investment group is thought to be preparing to mount a bid for troubled menswear chain Moss Bros Group as early as this week, in a deal that could value the menswear chain at £40m (US$81m).

Renewed speculation came after the chain, which owns brands including Cecil Gee and Savoy Taylors Guild, issued a profit warning on December 5, sending shares plunging to a five-year low. Moss Bros also said that it planned to cut 10% of its supplier base and noted it may be forced to reduce its workforce.

The Icelandic investor already owns 28.5% of Moss Bros through its Unity Investments subsidiary and has long been touted as a possible bidder for the group.

At the time of the last week’s announcement by Moss Bros, chief executive Philip Mountford revealed that like-for-like sales had fallen by more than 3% in the previous seven weeks after a positive run during most of the summer. He attributed the drop to lower spending by its male customer base due to mounting economic slowdown worries.

Baugur already owns the supermarket chain Iceland, the toy store Hamleys, the jewellery chains Goldsmiths, House of Fraser and Whittard of Chelsea, the tea and coffee company.

Moss Bros shares were trading 20.81% higher at 45 pence at 12:48pm.