HUGO BOSS TO CLOSE 20 MORE STORES

German clothing manufacturer and retailer Hugo Boss has announced that it will close approximately 20 freestanding stores globally over the next 18 months as part of its long-term plan to return to profitability. The company has already made numerous changes to its store portfolio in China.

The company’s second-quarter results were better than its previous quarter, with overall sales down only 1 percent in currency-adjusted terms, and a 4 percent drop in Euro terms. However, sales in the Americas were down 14 percent in local currencies, with the U.S. market seeing a decrease of 21 percent, due in part to more limited distribution of the BOSS core brand in the wholesale channel.

In the group’s own retail business, which includes outlets and online stores, currency-adjusted sales were stable, but retail comp store sales fell by 8 percent.

Overall, EBIDTA before special items dropped by 13 percent to EUR 108 million, and the group’s net income dropped by a whopping 84 percent to EUR 11 million, due in part to the decision to close the aforementioned freestanding stores.

“In an anything but easy market environment, we have performed well over the past few months,” said Mark Langer, CEO of Hugo Boss AG. “However, the market environment will remain difficult for the foreseeable future. It is on our own hands to strengthen our brands and our business model. As a company, we need to become more customer-centric, faster, and more flexible.”

The company has adjusted its sales forecast for 2016, with the Managing Board expecting currency-adjusted sales to either remain stable or decline by up to 3 percent in the full year. Sales are projected, however, to decrease in the Americas. EDIBTA, before special items, is now expected to decline between 17 and 23 percent in the full year.