Hugo Boss has recorded a 17-per-cent increase in first-quarter sales over pre-pandemic levels, reflecting what one analyst describes as a “well-executed rebranding strategy”.
Currency-adjusted sales rose to US$820 million (€772 million), driven by the German luxury brand’s key markets of Europe and the Americas, which grew 21 per cent and 17 per cent respectively against the first quarter of the 2019 financial year.
The important China market, however, failed to perform for the brand given tough Covid restrictions on retail trading hours towards the end of the quarter, with sales down 1 per cent over the same comparable period.
In January this year, Hugo Boss launched a rebranding campaign including two global star-studded ad campaigns and a website revamp to promote its shift towards more casual new designs and better engage with Gen Z.
“The campaigns resonated well in both regions due to the heavy representation of European and American celebrities and athletes, such as Hailey Bieber, Kendall Jenner and Anthony Joshua,” she said.
“This enabled the group to grow its operating profit by $41.4 million (€39 million) despite doubling its marketing investment, as consumers rushed to purchase the new designs at full price,” said Louise Deglise-Favre, apparel analyst at GlobalData. “This helped protect the group’s margins against supply chain cost increases, placing Hugo Boss in a good position for the rest of the year.”
Hugo Boss has forecast group earnings to grow by between 10 and 15 per cent during the full year, driven by its brand refresh and, Deglise-Favre noted, despite the increasing pressure on consumers’ discretionary incomes.
The company’s online sales surged 22 per cent worldwide, which Deglise-Favre attributed in part to the success of the group’s rebranding and investment in its online proposition.
In a program targeting Gen-Z consumers, Hugo Boss invited TikTok creators to stay in its temporary Hugo House in Palm Springs during the Coachella music festival, and through collaborations with social media stars, including Khaby Lame, to promote its products and boost brand awareness.
“However, Hugo Boss still has more work to do to fully establish itself as a key brand among Gen-Z,” said Deglise-Favre.
“Its recent announcement that it is entering the resale market later this year will undoubtedly boost its sustainability credentials, an important factor for younger consumers.”