Hugo Boss pins hopes on revamps

Hugo Boss says the renovation of several major stores should revive sales growth after the German fashion house reported a drop in first-quarter earnings due to reorganisation costs, higher marketing spending and a strong US dollar.

Hugo Boss says the renovation of several major stores should revive sales growth after the German fashion house reported a drop in first-quarter earnings due to reorganisation costs, higher marketing spending and a strong US dollar.

Finance chief Yves Mueller said stores had already been reopened in New York and Tokyo. The refurbishment of the company’s biggest flagship store on the Champs Elysees in Paris and a store in Chicago will be complete later in 2019.

“Store optimisations will drive performance,” Mueller told a conference call for analysts.

Hugo Boss shares slipped after it reported first-quarter operating profit fell 22% to €55m on sales up a currencyadjusted 1% to €664m, missing average analyst forecasts.

Sales fell a currencyadjusted 8% in the Americas, as visits to stores were hit by weaker consumer sentiment and lower tourist purchases.

Sales rose 4% in Asia, boosted by double-digit growth in mainland China, although the market was tougher in Hong Kong and Macau.

Sales of the core Boss brand were flat in the first quarter as growth in casual wear compensated for a slight decline in business wear, while its younger Hugo brand saw double-digit sales growth in casual wear.

Online sales jumped in the first quarter, up 26%, while retail sales rose 4% on a same-store basis.