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Hugo Boss Projects Single-Digit Sales Growth

Men's wear giant said growth in retail sales outstripped wholesale gains.

BERLIN — On the heels of its third record-breaking year in a row, Hugo Boss is projecting high-single-digit increases in currency-adjusted sales and earnings before interest, taxes, depreciation and amortization in 2013, driven by the group’s growing retail business.

This story first appeared in the March 15, 2013 issue of WWD.  Subscribe Today.

Final 2012 figures released Thursday confirmed preliminary results published in February. Net income rose 8 percent to 307 million euros, or $394.8 million, and EBITDA allowances before special items gained 13 percent to 529 million euros, or $680.3 million. Sales rose 14 percent to 2.35 billion euros, or $3.02 billion, which corresponds to currency-neutral growth of 10 percent.

All dollar figures are converted at the average exchange rate for the period.

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While Boss said all regions, distribution channels and brands contributed to 2012 growth, the group’s own retail business continued to forge ahead, exceeding wholesale sales for the first time. Sales in the group’s own retail network, including outlets and online stores, rose 19 percent on a currency-adjusted basis to 1.15 billion euros, or $1.48 billion.

The number of directly operated stores grew by 218 doors to a total of 840, with sales rising 17 percent to 758 million euros, or $974.8 million after currency adjustments. Outlet stores posted currency-adjusted sales growth of 21 percent, while Boss’ online business in Germany, the Netherlands, France, Great Britain, Austria, Switzerland and the U.S. rose 49 percent to 47 million euros, or $63 million. On a comp-store basis and adjusted for currency effects, the group’s retail sales grew 5 percent.

The wholesale business, which now generates 49 percent of group sales compared with 53 percent in 2011, rose 2 percent on a currency-adjusted basis to 1.14 billion euros, or $1.47 billion.

All Boss brands posted sales increases in 2012, with the core Boss label growing by 16 percent. Boss Green moved ahead 23 percent; Boss Orange gained 3 percent, and Hugo increased sales 12 percent. Men’s wear advanced by 15 percent to 2.10 billion euros, or $2.7 billion, and continues to contribute 89 percent of total sales. Women’s wear, again generating 11 percent of total sales, upped revenues 8 percent to 249 million euros, or $320.2 million.

Geographically, Boss noted solid performance in Western and Eastern Europe, with the U.K. boosting currency-adjusted sales 19 percent due to increases in the group’s own retail business there. Despite difficult market conditions in southern Europe, Boss posted double-digit growth in Italy and on the Iberian peninsula. Overall sales in Europe rose 10 percent, with profits up 5 percent.

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The U.S. was another top performer, with currency-adjusted sales rising 15 percent to 434 million euros, or $558.2 million, supported by both wholesale and retail channels. However, Boss pointed out that sales increases in existing retail space and new store openings made the U.S. the group’s biggest retail market in 2012. Currency-adjusted sales were up 9 percent in Canada and 21 percent in Central and South America. Profits in the Americas gained 25 percent.

In the Asia/Pacific region, difficult market conditions in China as well as Oceania dampened growth to 4 percent on a currency-adjusted basis (14 percent in euros) to reach 353 million euros, or $454 million. On a currency-adjusted basis, the group’s own retail sales gained 8 percent, while wholesale sales fell 9 percent. Profits nonetheless advanced 18 percent.