New Hugo Boss chief executive Daniel Grieder set the ambitious target of doubling sales and ratcheting up profit margins on Wednesday, as the former head of Tommy Hilfiger stamped his mark on the German fashion house.
The German label, which had been struggling to revive its business for years before being hammered by the pandemic, reported a rebound in sales in the second quarter as lockdowns eased, particularly in Britain and China.
Under Grieder, the company aims to double sales to 4 billion euros ($4.75 billion) from the 2 billion it slumped to in 2020 and restore its operating profit margin to 12 percent of sales by 2025, the same level it was at in 2019 before the pandemic.
The Swiss CEO, who took over the top job in June, said it was his ambition to make Hugo Boss one of the world’s top 100 global brands including by spending more than 100 million euros on marketing between now and 2025.
When Grieder was in charge at Tommy Hilfiger, the U.S. brand grew faster than Hugo Boss, posting sales of $6.9 billion in 2020, far ahead of its German rival. Grieder had put a big focus on expanding online sales at Tommy Hilfiger.
Hugo Boss, known for its smart men’s suits, wants e-commerce to account for 25-30 percent of sales by 2025 from about 16 percent now. It also plans to refurbish around 80% of its stores, costing around 500 million euros by 2025.
“There is a massive opportunity for premium fashion,” Grieder said in an online presentation, noting that the size of the high-income population would double in coming years.
Shares in Hugo Boss rose 1.9 percent at 0830 GMT.
Grieder said Hugo Boss would revamp its brand to make it more modern, adding the colour camel to its black and white branding, and extend a push to appeal to younger consumers, launching the new slogan: “Be your own Boss”.
He also raised the prospect of new product areas, including make-up, homewear, underwear, jeans and even drinks.
Hugo Boss, which had already reported preliminary second-quarter results last month, said sales were up 7 percent in the UK, compared with 2019, and up 33 percent in mainland China, despite calls for a boycott of Western brands launched in March.
While sales of casual styles continued to accelerate, as the working-from-home trend boosts more relaxed dressing, Hugo Boss said it had also seen a recovery in sales of formal wear due to pent-up demand for business and party fashion.
Meanwhile, sales in Europe were just 4 percent below levels recorded in 2019 and were down 5 percent in the Americas. Around 20 percent of the company’s global store network was still closed during the second quarter, but online sales grew 27 percent.
- Reporting by Emma Thomasson, editing by Kirsti Knolle and Anil D’Silva, of Reuters.