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Hugo Boss sees 'uneven' sales growth

Hugo Boss Group grew 3% in the first nine months of this year, although growth came “unevenly” across distribution channels.

Sales reached €1.78bn for the nine months to September 30, up from €1.74bn last year. In local currencies, sales were up 4%.

Sales in the US rose by double-digits, while Europe rose 4%, or 5% on a currency adjusted basis. In Asia sales fell 1%, although on a currency adjusted basis rose 4%, while the Americas saw 2% growth or 4% adjusted.

However Hugo Boss’ distribution channel paints a more uneven picture. Wholesale was down 7% on a currency adjusted basis, which the group blamed on “the consistently difficult market environment, the takeover of stores from wholesale partners and changing delivery cycles all influenced this development”.

Its retail arm, including stores and online, grew by 18% in local currencies, largely driven by new openings with like-for-likes up just 2%.

Including the takeover of 110 shop-in-shop units from wholesale partners, the network of directly operated stores was expanded by 152 to 992 locations in net terms in the first nine months of 2013.

The group’s gross profit margin improved by 250 basis points to 63.6% in the first nine months, mainly as a result of its retail expansion and the non-recurrence of prior year inventory devaluation effects.    

EBITDA before special items rose by 4% to €407m and adjusted EBITDA margin was 22.8% in the first nine months, 30 bps above the previous year’s figure.

Chief executive Claus-Dietrich Lahrs said: “The results for the first nine months show that Hugo Boss has systematically addressed the difficult market environment. Our focus on own retail and the high quality presentation of our brands has paid off.

“Demand in our own stores picked up noticeably in the third quarter compared to the first half year. We are therefore anticipating strong growth in sales and earnings in the fourth quarter.”   

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