Hugo Boss aims to get sportier
German fashion house Hugo Boss has sharply raised its earnings outlook for 2015 as it increases its network of stores and eyes strong growth in China. Sportswear has become more important to the group, and its sponsorship activities with sports such as golf, Formula 1 and sailing are proving popular in Asia. “The Chinese are looking out for great sportswear, they look for something branded,” CEO Claus-Dietrich Lahrs said.
The group, best known for its men’s suits, said it now expects sales of EUR3 billion in 2015 and core earnings of EUR750 million. That compares with previous targets of EUR2.5 billion in sales and EUR500 million in core earnings.
“All of those driving elements we defined at the end of 2009 and the beginning of 2010 are playing out more strongly than we expected,” Mr Lahrs told analysts at an investor day.
“Experts believe growth in luxury will slow in 2012 compared to 2011 but we are confident we can grow more strongly than the competition,” finance chief Mark Langer said.
Hugo Boss said it expected sales in Asia to almost triple by 2015 compared with 2010, mainly thanks to China, and that they would account for around 21% of sales by 2015.
The group also said around 55% of its sales would come from its own retail business in 2015 and that it planned to open about 50 new stores a year.
“If you want to become important in Asia there is no alternative than to do business at your own risk, with own stores,” Mr Lahrs said, adding that retail expansion would account for the majority of investment over the next three years.
As at the end of September, Hugo Boss operated 591 of its own stores. Sales via its own retail business, which includes online and outlets, accounted for 40.4% of sales in the first nine months of 2011.
