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Lead times cut as Hugo Boss UK outperforms Europe

Hugo Boss is to shorten lead times after improvements in the speed of replenishment helped its UK arm outperform the rest of Europe last year.

The UK division was the only part of the German firm’s European business to record sales growth last year, up 4% over the fiscal year 2009 to an undisclosed amount. The European division reported a sales slump of 11% to €1.04bn (£918.6m).

The strong UK sales performance was driven by Hugo Boss stores, which accounted for 30% of total UK business in 2009, versus 22% in 2008.

Hugo Boss UK managing director Bernd Hake said: “We’ve been able to improve the way the stores operate. Computers are working much better to help with replenishment. We had better control of franchise partners and they went in line with Sales promotions to increase profitability.”

As part of a strategy to ensure the brand reacts to demand, Hugo Boss is to increase its number of monthly drops next year to support both its retail and wholesale businesses.

“The mother company is trying to reduce lead times for 2011,” said Hake. “Hugo Boss needs to be closer to the end consumer and they need to see more newness in the product.”

The amount of forward-order product continued to decline in 2009 to 54%, down from 60% in 2008, on the back of the strategy.

Hake was confident 2010 would be “an excellent year” for the UK business. He said: “Autumn 10 [wholesale]orders are up 30% year on year and retail has outperformed over the first quarter.”

The Hugo Boss business has projected a return to total sales growth in 2010 and forecast EBITDA would grow faster than sales.

Total group sales dropped 7% in 2009 to €1.56bn (£1.38bn), while EBITDA fell 6% to €270m (£238.1m).

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