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UK store acquisitions will add £3.5m to Hugo Boss profits

Hugo Boss UK is set to boost its profits by £3.5m in 2011 after its acquisition of 15 franchise stores previously operated by Moss Bros.

Hugo Boss has doubled its UK company-owned store presence with the £16.5m acquisition this week.

Hugo Boss UK managing director Bernd Hake told Drapers the business, which posted sales of £92m in 2010, would use the stores to ramp up its womenswear, footwear and accessories offers in the UK.

Stores that are part of the deal include London’s Regent Street, Bond Street, Brent Cross and two locations in the City of London. It will take Hugo Boss’s UK standalone store total to 35. The leases are expected to transfer between April 1 and the end of the year, during which period Hugo Boss expects to generate EBITDA of £3.5m from the sites.

Hugo Boss will invest between £2m and £3m in the stores over the next 24 months and will overhaul key London locations including Regent Street and Sloane Street ahead of the 2012 Olympics. Along with its Westfield Stratford store, which is in development, these stores will house Hugo Boss’s full offer, use more mannequin displays and include technological elements such as TV screens. The overhauls will start this month.

The majority of the former franchise stores will have footwear and accessories added to their offer, with womenswear being added to some.

“We acquired the stores because we want to offer our customers choice,” said Hake. He expects to have 40 company-owned stores in the UK and will focus expansion on airport sites, among other areas.

Moss Bros will continue to sell Hugo Boss in its own stores, and Hake said Moss Bros, as well as its 250 other UK wholesale and franchise partners, remained “key” to the business.

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