- In group currency, sales decreased 10% to EUR497m (US$599m) from EUR555m a year earlier.
- Despite the pandemic weighing on key European markets, momentum accelerated for Hugo Boss online, in Mainland China and in casualwear.
- Net losses narrowed to EUR8m from EUR18m a year earlier, while gross margin narrowed to 60.4% from 62.9%.
Hugo Boss experienced a continued sales decline during Q1 FY2021, with revenue falling by EUR58m to EUR497m (US$599m), despite being up against weak comparatives last year, when most markets were approaching the initial peak of the virus.
Thanks to pent up demand, its revenue in China, the region worst hit in the comparative period, almost doubled on the year, and was 29% above Q1 FY2019. However, its larger American and European markets fared much worse, with reported sales in these regions falling by 11% and 17% respectively, with Europe being struck particularly badly by temporary store closures, as around half of its estate was shuttered. However, with the Covid-19 vaccine roll-out making significant headway in many of its core markets, like the USA, UK and Germany, Hugo Boss should start to see an uplift over the coming months, as consumers will feel more comfortable returning to physical stores.
While Hugo Boss previously relied heavily on formalwear, which has fallen out of favour throughout the pandemic due to cancelled events and increased home working, it has now pivoted towards more casual styles, which accounted for around half of its sales in Q1 and returned to growth. It has been successfully utilising collaborations with entities like the National Basketball Association and Russell Athletic, a well-renowned US sports brand, to drive greater awareness of this new offering, with these ranges experiencing very strong demand and enabling Hugo Boss to boost its casualwear credentials. It has also been featuring casualwear edits and outfit suggestions in prime positions on its website’s homepage, aiding visibility and inspiring shoppers to make impulse purchases.
Though sales at Hugo Boss’ own physical stores fell by 25% in Q1 FY2021, this was partly offset by its own online operations, which grew by 72%. However, this channel still only comprises 23.2% of its own retail business, despite having launched 12 new websites in additional markets during the period, and consumers being unable to visit many of its physical locations due to closures, so there is still a lot of work to be done to optimise its digital platforms so they appeal more to shoppers. Positive reactions to its new Spring/Summer 2021 collection also drove revenue for its wholesale division to rise by 1%, boding well for Q2, when the impending lifting of lockdowns should boost demand for these ranges even further.”