Hugo Boss sees powerful recovery, brimming with confidence for 2022
Hugo Boss issued its final 2021 figures on Thursday — following the preliminary results delivered in January — and said group sales grew 43% to €2.786 billion, “returning to pre-pandemic levels”. It was also upbeat on the current year and said its first new-concept global anchor store will open in London in the second quarter.
Profit wise for 2021, the firm’s EBIT “significantly improved” to €228 million against a loss of €236 million in the previous year. The margin hit 8.2% after a negative 12.1% margin a year earlier. It was helped by efficiency gains, particularly in the group’s own retail business, as well as strict cost management. And its free cash flow and net financial position “hit record levels”.
It’s all very encouraging for the company that has spent recent periods reinventing its key Hugo and Boss brands. It said that strategic highlights of the year were its “successful branding refresh” and the creation of a “strong digital buzz”.
It added that it has had “strong feedback” on its SS22 collections, “fully embodying the branding refresh” and that digital sales reached 20% of its total sales figure for the first time ever last year.
As for its outlook, it expects sales to grow to a record of between €3.1 billion and €3.2 billion – which would mean a rise of between 10% and 15% – for the current year. EBIT will increase between 10% and 25% to a range of €250 million up to €285 million.
Investors in the company – which includes the UK's Frasers group that only in recent days has increased its stake – will be hoping that Hugo Boss can repeat its 2021 feat of exceeding its full-year sales and earnings targets.
Looking back at last year, the company’s currency-adjusted sales effectively returned to pre-pandemic levels and the business said that “importantly, growth was broad-based in nature, with sales increasing for both brands, as well as across all regions and distribution channels”.
This was driven by “a noticeable pick-up in global consumer sentiment starting in the second quarter”. In addition, the successful execution of several key brand, product, and sales initiatives as part of its CLAIM 5 growth strategy “also fuelled brand momentum and accelerated the business performance in the second half”.
This all bodes well for 2022, with the branding refresh that began in January having gone down well so far.
The company is putting heavy support behind its brands and said sell-through rates in physical stores, as well as online, “clearly exceed those of previous collections”.
It added that “the ongoing step up in marketing investments – with a strong focus on social media, exciting events, and exceptional collaborations – will ensure both Boss and Hugo continue to create buzz also going forward. At the same time, product investments to further drive casualness and comfort across all wearing occasions will strongly contribute to establishing Boss as a true 24/7 lifestyle brand and Hugo as the first point of contact for younger customers”.
And it will continue to invest in the further digitalisation of its business model and in the optimisation and modernisation of its global store network.
On that front, it’s aiming to roll out its brand new store concept to more than 100 points of sale in the current year. The opening of the company’s first global anchor store on London’s Oxford Street in Q2 “will mark a particular important milestone in this regard”.
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