HUGO BOSS CONTINUES TO SEE PROGRESS IN SECOND QUARTER
German-based clothing brand Hugo Boss made good progress in the second quarter of 2017. Comp store sales in its own retail business picked up significantly in all three regions, with online business likewise growing in the second quarter. Sales in the wholesale business fell short of the prior year due to delivery shifts as compared to the prior year. The core markets of Great Britain and China again performed well, while U.S. business expanded for the first time in two years. Despite increased marketing expenses and spending on the digital transformation of the business model, operating profit remained at the prior year’s level. On this basis, Hugo Boss is confirming its target of stable full-year sales and earnings in 2017.
The spring/summer 2018 collections which were presented recently reflect the focus on the Boss and Hugo brands for the first time. The increased profile of the two brands was showcased at impressive fashion shows: Hugo in June at Pitti Uomo in Florence, and Boss in mid-July at the New York Fashion Week. A broad audience was able to follow the shows via livestreams provided on the website and on social media.
Wholesale partners reacted positively to the new spring/summer 2018 collections. Above all, they welcomed the increased clarity of the Boss brand message. Orders for the brand’s athleisure wear increased at double-digit rates, partly compensating for more difficult trends in the brand’s businesswear. Orders for Hugo are up solidly compared to the prior year period, driven by a strong double-digit increase in casualwear in particular. Across both brands, order remained broadly stable year-over-year, outperforming the global wholesale market.
The first parts of the new collections will be available in stores from the end of this year. To tie in with this, the company is also aligning its distribution activities more closely to customers’ needs. Thus, Hugo Boss is widening its range in the commercially important entry-level price ranges, continuing to expand its omni-channel services and systematically investing in sales staff training and development. In addition, it will be enhancing the shopping experience from fall 2017 with the step-by-step roll-out of new store concepts for Boss and Hugo.
Against this backdrop, Hugo Boss will be pursuing its goal of growing sales and earnings in 2018. Looking ahead to 2019 and beyond, Hugo Boss assumes that sales will grow more strongly than the relevant market segment and that the operating margin will increase again.
“Our strategic realignment is beginning to take effect. Business in the second quarter was encouraging. We made considerable headway in the United States and in online business in particular,” said Mark Langer, chief executive officer of Hugo Boss AG. “We are reaffirming our full-year outlook and facing the future beyond this year with confidence. The new brand strategy has been very positively received by wholesale partners. Consequently, we have passed an important milestone in our strategic realignment.”
