The new chief executive of German fashion house Hugo Boss set an ambitious target on Wednesday to double sales to €4 billion ($4.75 billion) and improve the operating profit margin to 12 percent of sales by 2025.
Hugo Boss, which has been hit hard by coronavirus lockdowns, also reported a rebound in sales in the second quarter, particularly in Britain and China.
Chief executive Daniel Grieder, the former Tommy Hilfiger boss who took over in June, said it was his ambition to make Hugo Boss one of the world’s top 100 global brands, with marketing spending set to be more than €100 million between now and 2025.
The company said it would pursue its existing strategy of trying to become more appealing to younger consumers and would also seek to double sales of women’s fashion by 2025.
Hugo Boss, known for its smart men’s suits, wants e-commerce to account for 25-30 percent of sales by 2025 from about 16 percent now. It also plans to refurbish around 80 percent of its stores, costing around €500 million by 2025.
Shares in Hugo Boss rose 1.9 percent at 0830 GMT.
The company said its core Boss brand saw second-quarter sales down a currency-adjusted 5 percent, while Hugo, aimed at a younger audience, reported a 2 percent rise in sales.
While sales of casual styles continued to accelerate, as the working-from-home trend boosts more relaxed dressing, Hugo Boss said it had also seen a recovery in sales of formal wear due to pent-up demand for business and party fashion.
Hugo Boss, which had already reported preliminary second-quarter results last month, said sales were up 7 percent in the United Kingdom, compared with 2019, and up 33 percent in mainland China.
The recovery in China came despite calls for a boycott of Western brands launched in late March over Western accusations of forced labour in Xinjiang when at least three Chinese celebrities said in March they were dropping Hugo Boss.
Meanwhile, sales in Europe were just 4 percent below levels recorded in 2019 and were down 5 percent in the Americas. Around 20 percent of the company’s global store network was still closed during the second quarter.
The company reiterated that it expects currency-adjusted group sales in fiscal year 2021 to increase by between 30 percent and 35 percent.
By Emma Thomasson; editors: Kirsti Knolle and Anil D’Silva.
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