BERLIN — Strong performance of the group’s own retail business continued to propel sales and earnings growth at Hugo Boss in the third quarter.
Net income for the quarter ended Sept. 30 rose 9 percent to 112.5 million euros, or $149 million at average exchange rates for the period. Earnings before interest and taxes increased 5 percent to 150.5 million euros, or $199.4 million. Chief financial officer Mark Langer said improvements in gross profit margin, which gained 340 basis points in the quarter, were the main driver of the earnings gain.
Group sales grew by 2 percent to 657.9 million euros, or $871.5 million, negatively influenced by currency effects and a 10 percent decline in the group’s wholesale business.
Sales from the group’s own retail activities (including outlets and online business) rose 18 percent to 320.5 million euros, or $424.6 million, and by 23 percent in local currencies. Comp-store growth after adjustment for currency effects was up 4 percent. In the first nine months of 2013, the company’s own retail sales contributed 51 percent of group sales, up from 45 percent for the period a year previously, and is expected to generate 60 percent of group sales in the fourth quarter. Boss currently operates 992 own retail stores, compared to 840 in 2012.
“Demand in our own stores picked up noticeably in the third quarter compared to the first half-year,” said Hugo Boss chief executive officer Claus-Dietrich Lahrs. “We are therefore anticipating strong growth in sales and earnings in the fourth quarter.”
The Metzingen, Germany-based group more clearly defined its full-year forecast Thursday, which had previously called for “high-single-digit” increases in sales and operating profit growth for the year. The group now said it expects full-year currency-adjusted sales growth of between 6 and 8 percent, supported by all regions, with operating profit (earnings before interest, taxes, depreciation and amortization before special items) projected to grow by 6 to 8 percent as well.
The group continues to anticipate double-digit growth in its own retail business, with sales in the wholesale channel declining at a midsingle-digit rate due to the difficult market environment and shop-in-shop takeovers from its wholesale partners. Excluding takeovers, which involved about 110 shops-in-shop, the group’s directly operated store network will be expanded by about 50 doors in 2013.
Acknowledging that 2013 had turned out to be more difficult than originally expected, Langer told analysts Boss is nonetheless holding to its midterm growth plan, which anticipates 3 billion euros in sales and 750 billion euros in operating profit in 2015, based on organic growth of its existing brand portfolio.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast