BERLIN — While the pace of growth slowed at Hugo Boss last year due to a challenging market environment, including negative currency effects and a significant lag in the Chinese economy, the Metzingen-based fashion firm is looking to pick up the tempo again in 2014.
This story first appeared in the March 14, 2014 issue of WWD. Subscribe Today.
Boss said it “wants to grow faster in 2014 than in the past year” and is forecasting high-single-digit growth in 2014 currency-adjusted sales as well as in operating results.
Based on this outlook, the company said it expects to meet its midterm target of reaching 3 billion euros, or $4.17 billion at current exchange, in sales by 2015.
In final 2013 figures released Thursday, Boss reported a 7 percent gain in both net income and earnings before interest, taxes, depreciation and amortization before special items to reach 333.4 million euros, or $442.9 million, and 564.7 million euros, or $750.1 million, respectively, while sales rose 4 percent to hit 2.43 billion euros, or $3.23 billion.
Dollar figures are converted from the euro at average exchange for the period to which they refer.
Given the ongoing expansion of its retail business, Boss no longer expects to reach a 25 percent EBITDA margin in 2015 as originally planned, but holds on to the target for the medium term. In 2013, the adjusted EBITDA margin increased 70 basis points to reach 23.2 percent.
The group’s expanding retail network continued to achieve above-average growth. Retail sales gained 14 percent to reach 1.31 billion euros, or $1.75 billion, with comp-store sales adjusted for currency effects up 2 percent. The group’s own retail business now accounts for 54 percent of consolidated sales, up from 49 percent in 2012. In the past year, Boss added 170 doors to its retail store network, which now encompasses 1,010 locations. In 2014, about 50 new stores, excluding takeovers, are planned.
Wholesale business was down 7 percent to 1.06 billion euros, or $1.41 billion, impacted by the group’s takeover of sales floor space previously operated by wholesale partners, as well as the overall market environment.
Europe, which currently contributes 60 percent of group sales, led 2013 sales growth, with double-digit gains in the U.K. and France contributing to a 6 percent jump for the year. Sales in the Americas rose 2 percent (6 percent on a currency-adjusted basis), driven by gains in the U.S. In Asia, sales slipped 2 percent, but were up 4 percent on a currency-adjusted basis, boosted by the group’s retail expansion in the region.
By brand, the Boss core brand reported 3 percent sales growth, with men’s wear growing at the same level and women’s wear gaining 5 percent to 263 million euros, or $394.4 million. As in 2012, Boss women’s sales continued to represent 11 percent of Boss brand sales.
Boss Green surged ahead 14 percent and Hugo reported a year-on-year increase of 11 percent, but sales of Boss Orange were down 6 percent.