Hugo Boss says 20% of sales were online in its latest financial year – and that it will continue to invest in digital and in its stores as it targets record sales this year. The upmarket clothing brand now expects ecommerce to grow to between 25% and 30% of group sales by 2025.
The brand is investing in digital through its Claim5 programme, which sees a step up in marketing with a focus on social media, events and collaborations. It is also investing in putting digital at the heart of its business model while introducing new store concept that will be taken to more than 100 sites during the current year, including its first anchor store on London’s Oxford Street in the second quarter.
The update came as Hugo Boss reported group sales of €2.8bn (£2.35bn) in 2021, 43% up on the previous year, with 20% of sales taking place online. Earnings before interest and tax rose to €228m (£191m) – from a loss of €236m (£198m) in the previous year. In 2022, it expects to see earnings rise by between 10% and 25%, as it offsets investment in its Claim 5 strategy through efficiency gains.
Hugo Boss chief executive Daniel Grieder says the brand made a strong comeback in 2021. “Right from its start, our growth strategy fuelled brand momentum around the globe,” he says. “The highly successful branding refresh and ongoing investments will further drive relevance for Boss and Hugo in the current year. We have everything it takes to reach record sales in 2022. As a team, we will take a big step closer towards our goal of becoming one of the top 100 global brands.”
Louise Deglise-Favre, apparel analyst at GlobalData, says: “Hugo Boss’ focus on its digital proposition paid off, with its total currency-adjusted digital sales in FY2021 growing 55% on the previous year and 85% on FY2019, representing 20% of the group’s total sales. Though this is still low compared to the online penetration of the apparel market in key countries such as the UK (47.4%) and Germany (35.1%) in 2021, Hugo Boss is well positioned to reach its goal of digital accounting for 25-30% of total sales by 2025.
“Continuing to focus on impactful digital marketing content featuring celebrities relevant to younger generations, and user-friendly features on its website such as personalized product recommendations will ensure it reaches, and potentially surpasses, this target.”
• The menswear brand has now suspended its online and in-store sales in Russia, in the light of Russia’s invasion of Ukraine. It says that sales there and in Ukraine accounted for 3% of sales in its last financial year and that it will continue to support all its employees who have been affected. As yet, it says, “it is difficult to assess the implications of a potential further escalation of the war in Ukraine on overall economic and sector growth.”
Grieder says: “At Hugo Boss we are deeply concerned by the terrible situation in Ukraine. Our deepest empathy and thoughts are with the millions of people affected by the war and suffering from this humanitarian crisis. To help the people in need, we support the German Red Cross and other institutions, standing in solidarity with each and every one calling for peace. We will continue to monitor the situation very closely and adapt our measures and financial support accordingly.”
