German fashion label Hugo Boss experienced a weak first quarter: turnover and profit were both lower than expected, leading the company to look for new ways to cut costs.
Fewer investments
Hugo Boss’ turnover dropped 4 % in the first quarter, down to 643 million euro, while net profit went down 49 % to 38.5 million euro. Analysts had predicted a drop, but not as big as this.
The company now hopes to save 50 million euro in 2016 thanks to renegotiated deals with the owners of its store network. It will also cut down on the number of new stores, which means its investments will drop from 220 million euro in 2015 to 160 – 180 million euro in 2016. In the short term, it will double down on its activities in the United States, where first quarter turnover dropped 16 % (after exchange rate fluctuations). The fashion label does expect better results in the second half of the year.
