The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
BERLIN, Germany — German fashion house Hugo Boss reported that first-quarter sales rose by a currency-adjusted 5 percent, powered by strong growth in China and the Americas, while operating profit increased slightly, allowing it to confirm its 2018 outlook.
After a string of profit warnings as sales fell in China and the United States, Boss has reversed efforts to take the brand more upmarket and expand in womenswear, and has refocused on premium men's clothing, but with a modern twist.
It is also investing in better integrating e-commerce and stores and said online sales rose by 43 percent in the quarter, helped by improvements to its website.
Boss shares, which are up 12 percent in the last year but still trade at a discount to luxury players such as Kering and LVMH, were indicated up 1.9 percent in pre-market trade.
ADVERTISEMENT
Boss reported sales of 650 million euros ($780 million), just shy of average analysts forecasts for 654 million, with a currency-adjusted rise of 12 percent in Asia/Pacific and 7 percent in the Americas.
A recovery in spending by Chinese shoppers over the past 18 months has fuelled revenue rises for many top luxury brands, although the sector still faces pressure, such as a strong euro and simmering U.S.-China trade tensions.
Earnings before interest, taxation, depreciation and amortisation (EBITDA) before special items rose to 99 million, ahead of average analyst forecasts for 97 million, with the depreciation of currencies outside the eurozone weighing.
The Boss brand saw sales rise a currency-adjusted 7 percent, while Hugo, aimed at a younger audience, slipped 6 percent, which the company said was due to Boss taking over selling space from Hugo, which is also paring its presence in outlet stores.
Menswear grew 6 percent, while womenswear slipped 3 percent. Hugo Boss announced in February that it is ending a partnership with designer Jason Wu, who led a push to expand its women's collections from 2013.
By Emma Thomasson; editors: Tom Sims and Louise Heavens.
In 2020, like many companies, the $50 billion yoga apparel brand created a new department to improve internal diversity and inclusion, and to create a more equitable playing field for minorities. In interviews with BoF, 14 current and former employees said things only got worse.
For fashion’s private market investors, deal-making may provide less-than-ideal returns and raise questions about the long-term value creation opportunities across parts of the fashion industry, reports The State of Fashion 2024.
A blockbuster public listing should clear the way for other brands to try their luck. That, plus LVMH results and what else to watch for in the coming week.
L Catterton, the private-equity firm with close ties to LVMH and Bernard Arnault that’s preparing to take Birkenstock public, has become an investment giant in the consumer-goods space, with stakes in companies selling everything from fashion to pet food to tacos.