Metzingen (dpa) – Fashion manufacturer Hugo Boss returned to profitability in the third quarter.
The bottom line was that the group, known for its men’s suits, earned 3 million euros, according to a statement on Tuesday.
In the previous quarter, Hugo Boss had posted heavy losses after most stores closed as a result of crown-related restrictions. Compared to the previous year, when the company still made a profit of 56 million euros, it was significantly lower.
“We have slowed down on the cost side,” CFO and current board spokesman Yves Müller said in a conference call on the figures. Hugo Boss, for example, exercised discipline when it came to discounts, even if the company, like its competition, worked with discounts. According to the manager, the group negotiated better rental conditions. Hugo Boss also saved on personnel: fixed-term contracts were not extended. The company was able to avoid layoffs for operational reasons, the manager said.
Sales in the quarter fell 26 percent to 533 million euros. While local demand in major markets has increased significantly compared to the previous quarter, business with tourists has still been severely affected by international travel restrictions, he said. This was especially true in the large metropolises.
The group positively mentioned the sustained dynamism in the online business and in the Chinese market. Online business, for example, grew double digits again in the quarter, 66 percent. This means that the share of sales is currently 10 percent, Müller reported.
Hugo Boss does not only depend on his own store, but also on platform associations like Zalando. The number of partners through whose online marketplaces the group offers its products will be further expanded. Hugo Boss also wants to expand its range, which is only sold on the Internet and is specially designed for customers there.
In general, the trend is more towards the leisure look. The online business was also driven by him, less by formal demand, Müller explained. That is why the group wants to expand the leisure sector. Hugo Boss already generates 80 percent of sales beyond the classic suit.
The operating result (before interest and taxes, EBIT) went from 83 million to 15 million euros. Here, too, the fashion retailer returned to positive territory compared to the prior quarter. Hugo Boss did not give an outlook due to uncertainties regarding the pandemic.