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Online is star performer at Hugo Boss, Pandora to close stores amidst online growth

Hugo Boss’s online business drove sales growth in its direct-to-consumer business in its third quarter results, as the brand recorded lower costs from its digitalisation efforts.

 

Overall, the brand’s retail business saw sales rise 2% in real terms to reach €415 million globally in the quarter. In its largest market of Europe, the figure was up 2% to €246 million.

 

Growth was strongest in the online channel, where sales rose 38%. Last year saw the launch of a new website, which the company has been continually optimising in terms of usability. This includes improving the site structure and navigation of the website.

 

In the brand’s outlets, sales were up 3%, while in freestanding stores and shop-in-shops they were stable. The company has made greater use of digital in its stores, with new store concepts including greater integration of omnichannel and in-store tablets and touch screens allowing orders.

 

There was a mild decline at the company’s wholesale business due to differences in ordering patterns.

 

However, the quarter saw the brand announce a new partnership with German pure player Zalando. This uses its partner programme platform, which allows Hugo Boss to manage the presentation of its products on Zalando’s site. This follows the company saying last year that it plans to cooperate with selective online merchants “whose platform matches the values of the two Group brands as closely as possible”.

 

Hugo Boss also noted a decline in its operating expenses as it limited the growth in administration expenses, attributing this to the digital transformation of the company’s business model.

 

This transformation includes the use of digital protypes when designing new products and using a digital showroom to demonstrate products to retailers. In addition, Hugo Boss has introduced automation into its warehouses and optimised inventory planning in its retail business.

 

The results come ahead of an investor day in London on 15 November where the brand will share information on the progress of its strategic initiatives.

Pandora plans store closures as online business grows

 

This week also saw Danish jeweller Pandora announce its Q3 results. The group’s overall revenue decreased 3% in local currency, with growth in its direct-to-consumer business failing to offset decline in its retailer channel.

 

The company announced a major plan called "Programme NOW" which will see it reducing acquisitions of franchisees and opening fewer stores. It will also pursue cost opportunities, reduce working capital and look to reignite sustainable revenue growth.

 

There was some cause for cheer as sales from the online eSTORE rose 34% in local currency. Pandora said there would be store closures going forward as the eSTORE grows. The company said net store openings between 2018 and 2022 would be fewer than previous guidance of 1000 in total.

 

Image credit: Hugo Boss and Pandora

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