German fashion label Hugo Boss‘ 2016 turnover dropped 2 %, but its net profit plummeted 39 %. Regardless, CEO Mark Langer remains upbeat about the future. A restructuring plan should result in increased profits for 2017 and particulary for 2018.
“Not an easy year”
“2016 was not an easy year for Hugo Boss. However, we reacted quickly and consistently to the changes in our environment and introduced a set of measures to put us back on the right track. The realignment is beginning to take effect and the first results are becoming visible. In particular, we managed to turn around our business in China. I am very confident that Hugo Boss will return to sustainable and profitable growth after this phase of stabilization”, CEO Mark Langer said.
Its wholesale activities suffered a 9 % turnover drop and its own retail network (with 442 Hugo Boss boutiques) also sold 6 % less, but its license sales luckily grew 12 %.
Its European turnover dropped 1 % (in local currencies), with lower sales in Germany and France. Its improved turnover in the United Kingdom failed to counter the drop elsewhere in Europe. There were also turnover drops across the globe: – 12 % in the United States, – 2 % in the Asia/Pacific region (and – 6 % in China specifically).
However, there was improvement in the final quarter, with a 20 % quarterly turnover increase in China, thanks (in part) to price cuts.
Its operational profit dropped 17 % to 493 million euro, while its net profit suffered a 39 % hit to 194 million euro, in part to store closures in China and the United States.
