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Hugo Boss to cut costs after sales dip

04/05/2016
Luxury fashion group Hugo Boss has reported sales of €643 million in the first quarter of 2016, a 4% decline, resulting in a 49% fall in net profit to €38.5m.

Following similar reports from fellow luxury retailers LVMH and Burberry, the Germany-based company saw sales in Europe dip 2% due to reduced tourism in the region following recent terror attacks.

Sales in America were down 8%, or 16% when adjusted for changes in currency. China saw an 11% decrease in sales, excluding foreign exchange effect.

The company plans to make cost savings of €50 million by the end of 2016 and cut annual investment to between €160 million and €180 million, down from €220 million last year.

Among the cost-cutting initiatives will be the renegotiation of rents and a review of its stores, raising the possibility that unprofitable outlets could be closed. A decision on closing stores will be taken “in the coming months”, Hugo Boss said.

Related stories:

Hugo Boss targets “sustainable growth” 03/11/2016
Hugo Boss takes a step back from the luxury market 26/10/2016
Hugo Boss to close stores as cost-cutting measure 08/08/2016
Tourist spending in Europe dips 19/07/2016
Hugo Boss names new CEO 18/05/2016
Boss at Hugo Boss to leave 18/02/2008
Boss beats expectations 07/02/2008
Footwear and leather goods sales rise 26% at Hugo Boss 27/04/2007
Shoes and accessories boost sales at Hugo Boss 23/03/2007

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