Hugo Boss will slow down its retail expansion in the UK after reporting n 18.2% rise in sales in the territory.
UK sales rose to £147.5m for the year to December 31, 2012. Sales in the wholesale division, which accounts for about 30% of turnover, totalled £48.4m compared with £99m in Hugo Boss UK’s retail arm.
This compares with a 60/40 sales split between retail and wholesale respectively in 2011. The increase in 2012 was attributed to the acquisition of 15 former Moss Bros franchise stores acquired on April 1, 2011 and the company’s programme of new store openings. Hugo Boss UK opened four standalone stores in 2012 in Knightsbridge in London, Edinburgh, Belfast and Nottingham.
Pre-tax profi t was flat at £16.5m in 2012, compared with £16.6m in 2011 due to investment in new stores.
But managing director Stephan Born, who was appointed last month, said that although Hugo Boss will continue its roll-out of new stores in 2014, it will do so only on a very selective basis, adding that its expanding retail footprint will be much less than in the last 18 months. The brand has 56 concessions and stores in the UK and 270 stockists.
Regarding wholesale expansion, Born added: “There is still potential in the UK market but distribution needs to fit the brand positioning. It must be a win-win.”
Born said he was confident about autumn and that womenswear held “untapped potential”.
He said: “I plan to keep the momentum going and build on the recent performance; womenswear is a key pillar for growth. Until now we’ve grown it in line with the rest of the business, but this will change over the next few years as it represents a huge opportunity for Hugo Boss.”