Hugo Boss, a German luxury fashion house, posted 16 per cent decrease in its sales to €555 million in first quarter (Q1) FY20 ended on March 31, 2020 compared to sales of €664 million in same period prior year. Gross profit fell from €424 million in Q1 FY19 to €349 million in the reported quarter. Net income reported a loss to €18 million.
“The Covid-19 pandemic is an unprecedented exceptional situation for our company too,” Mark Langer, chief executive officer of Hugo Boss, said in a press release. “We have done our utmost to ensure the financial flexibility and stability of our company. I am absolutely convinced that together we will safely navigate Hugo Boss through this unusual time.”
Sales in Europe fell 14 per cent to €367 million in the first quarter. Sales in the Americas were 15 per cent down to €98 million. AsiaPacific sales dropped 31 per cent to €74 million.
Group’s own retail business declined 16 per cent to €333 million. Brick and mortar retail dropped 20 per cent to €295 million. The wholesale business fell 17 per cent to €206 million.
Both Boss businesswear and casualwear recorded low double-digit sales decline in the first quarter. Sales of brand Boss fell 17 per cent to €473 million. Sales of brand Hugo decreased 11 per cent to €82 million.
Sales of menswear were down 17 per cent to €499 million. Womenswear sales fell 15 per cent to €56 million.
The group further reported that unlike in Europe and the Americas, where business is impacted as a result of the pandemic and the continuing closures of points-of-sale, Hugo Boss is currently seeing steady improvements in mainland China. Since the end of March all own retail stores and shop-in-shops have been reopened in China, and the sales achieved in April were only around 15-20 per cent below the prior year.
Hugo Boss expects both sales and earnings to decline in the second quarter due to continuing closures of the group’s own stores as well as points-of sale at important partners in Europe and the Americas which usually contribute 85 per cent to group’s sale.