Despite challenging 2014, Hugo Boss sales climb 6%

19 Mar '15

3 min read

In 2014, what its CEO called a challenging year, sales at luxury and fashion goods marketer, Hugo Boss climbed 6 per cent over 2013.

While currency-adjusted sales rose by 6 per cent year on year in 2014, reporting currency revenues too drove up 6 per cent to €2,572 million from €2,432 million in the previous year.

In a press release, Hugo Boss said driven by double-digit growth in UK and expansion in nearly all markets in the region, sales in Europe increased by 7 per cent from 2013.

In the Americas, sales climbed by 4 per cent on a currency-neutral basis and Asia/Pacific posted a 7 per cent rise in currency-neutral sales from market share gains in China and solid growth in other markets.

Full year sales in the Group's own retail business were up 12 per cent on the previous year on a currency-adjusted basis.

Currency-adjusted comparable store sales also rose 3 per cent over 2013. In 2014, Hugo Boss expanded its store network by a net 31 stores to 1,041 outlets as against 1,010 in 2013.

The womenswear business rose at a particularly sharp rate in the reporting year, with sales climbing by 10 per cent to €289 million compared to €263 million the previous year.

Adjusted for currency effects, this translates into an increase of 11 per cent and Boss Womenswear under the guidance of artistic director, Jason Wu grew by as much as 18 per cent over the previous year.

According to the fashion marketer, the strong growth in the Group's own retail business as well as lower markdowns caused the gross margin to improve by 120 basis points to 66.1 per cent from 64.9 per cent.

Despite the increased selling and distribution expenses arising from the expansion of the Group's own retail business, EBITDA before special items rose by 5 per cent to €591 million in 2014.

However, adjusted EBITDA margin contracted by 20 basis points to 23.0 per cent from 23.2 per cent in 2013.

At €333 million, consolidated net income attributable to the shareholders of the parent company was marginally up by just 1 per cent on the previous year.

We did well in a challenging market environment last year," said CEO Claus-Dietrich Lahrs, during the Company's annual press conference in Metzingen.

"We continued to enhance and hone our strategy. Accordingly, we will be expanding our market position in the luxury and womenswear segments and reinforcing our own retail business”, he added.

Hugo Boss said it increased its free cash flow substantially in 2014, thus further lowering debt. Free cash flow improved by 17 per cent to €268 million compared to €230 million in 2013.

“This was primarily due to a reduction in capital expenditure to €135 million, down from €185 million in 2013,” Hugo Boss explained.

As a result, net debt declined to €36 million from €57 million in 2013 and average trade net working capital climbed by 16 per cent year on year to €503 million.

However, the year-over-year increase in inventories moderated compared to the earlier year to 15 per cent in euro terms and 8 per cent in local currencies at the end of the period. (AR)

Fibre2fashion News Desk - India

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