Hugo Boss expects trading to remain stable this year, after the group’s sales dropped 4% to €2.7bn (£2.3bn) in 2016.
The German fashion house saved more than €100m (£87m) in costs and investment over the last year and will continue to keep a strict control on expenses in 2017, helped by renegotiated rents and the closure of loss-making stores.
Sales grew in the high single-digit range in the UK and smaller markets but this was partially offset by declines in Germany and France last year.
In China, sales fell by 6% in currency-adjusted terms but momentum did improve over the course of the year. In the fourth quarter, sales on the Chinese mainland grew by almost 20% on a like-for-like basis.
Its retail sales increased 2% during the year, but wholesale sales fell 9% compared with the previous year as it restricted the distribution of its brands with “discount-driven” retailers.
Hugo Boss chief executive Mark Langer said the cost-saving measures and realignment introduced last year and the first results are becoming visible.
“We are adjusting our business model to changes in customer behavior. With the clear alignment of our brand portfolio into Boss and Hugo we will be able to make better use of our strengths in the upper premium segment,” he said. “I am very confident that Hugo Boss will return to sustainable and profitable growth after this phase of stabilisation.”
It expects sales to remain stable on a currency-adjusted basis in 2017, with EBITDA between -3 to +3% compared with the previous year.