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Hugo Boss sales dip 4% in Q1

Hugo Boss’s group revenue fell by 4% to €643m (£507m) in the first quarter of 2016 as difficult trading conditions in the Americas and Asia Pacific markets put pressure on sales.

EBITDA before special items fell by 29% to €93m (£73m) compared to the same period last year, while EBIT fell 48% to €54m (£42.6m).

Sales were down by 3% on a currency-adjusted basis for the group as a whole, falling by 1% in Europe. Sales fell in France and the Benelux region in particular, but business in the UK increased by 4% in local currency, it said.

In the US market, sales fell by 16% adjusted for currency effects, due to declines in both own retail and wholesale. In China, sales fell by 11% year-on-year excluding currency impact. The group reduced its prices in China by around 20% to further align with European levels from spring 16.

Retail sales were broadly stable while wholesale sales fell by 9% on the previous year in local currency. Womenswear was hardest hit, falling by 4%, compared with 2% in local currencies for menswear.

Hugo Boss expects a single-digit decline in full-year operating profits compared to last year, when it reported EBITDA of €594m (£469m). It also said it plans to renegotiate rental agreeements on its own stores, tighten administration expenses and marketing budgets, as well as reviewing loss-making stores.

Chief executive Claus-Dietrich Lahrs resigned from his role at the end of February, two days after the business issued a profit warning.

 

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