HUGO BOSS RETURNS TO PROFIT AFTER A TOUGH 2016
German-based clothing brand Hugo Boss has recorded higher sales and earnings in the first quarter of 2017 compared to the prior year.
Growth in Europe and Asia more than compensated for the decline in sales seen in the Americas. The core markets of Great Britain and China showed particularly solid growth. The business in Germany was up, too, thanks to the wholesale business.
In the U.S., the market environment was affected by declining pace in the retail business and heavy discounting. In comparison to the prior year, however, Hugo Boss managed to restrict the decline in sales in the American market, even though the company evaded the discount pressure from trade partners as much as possible and the wholesale business continued to be burdened by distribution restrictions. A solid increase in earnings in the first quarter was bolstered by ongoing strict cost management. The company therefore confirms its financial outlook for the full year.
In the second half of the year in particular, Hugo Boss will expand its offering in the commercially important entry-level price range and strengthen its collection in the casualwear section especially. A comprehensive set of measures primarily focused on increasing customer traffic and commercially optimizing the Hugo Boss website is intended to bring the e-commerce business back on course towards growth. Correspondingly, the company expects sales in the Group’s own retail business to increase during the rest of the year.
A milestone in the realignment of its business model is the spring/summer 2018 collection, which will be the first to reflect the future concentration on the BOSS and HUGO brands. This will be presented to its retail partners in the next few weeks.
Additionally, both brands will put on their own fashion shows – HUGO at the Pitti Uomo menswear trade show in Florence in mid-June and BOSS at the New York Fashion Week in July.
“We’ve made a solid start to the current fiscal year. In Europe and Asia especially, we’ve been heading in a positive direction,” said Mark Langer, chairman of the Managing Board of Hugo Boss AG. “Our strategic realignment is coming along well, and in some areas it’s already proving a success. The positive feedback from our retail partners and customers regarding the realignment of our brand portfolio makes me convinced that we are on the right track. In the next weeks, we will be presenting our new collections to the public. That’s an important milestone in implementing our strategy. I am convinced that, after this year of stabilization, we will return to profitable and sustainable growth.”