FashionMag.com USA - Hugo Boss 2009 profit falls, sees challenges ahead

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02-03-2010

Hugo Boss 2009 profit falls, sees challenges ahead

FRANKFURT, Feb 3 (Reuters) - German premium fashion house Hugo Boss (BOSG_p.DE) reported a 7 percent drop in full-year sales while restructuring efforts kept margins stable, it said on Wednesday 3 February, pointing to further challenges ahead.

Hugo Boss

Chief Executive Claus-Dietrich Lahrs said he was "cautiously optimistic" for the current year, "especially as we used the past year to strengthen our competitive advantage".

"The year 2010 as a whole will still be a big challenge for our industry, since many markets will see only very modest growth. However, we expect our market environment to stabilise over the course of the year," Lahrs said.

Boss's performance improved in the fourth quarter as it said sales came in slightly above last year's level. It had earlier expected a drop of 9 percent.

Lahrs told Reuters earlier that the company benefited from retailers' re-orders in the quarter as many had been too cautious initially. [ID:nLDE60H2CC]

Hugo Boss shares extended losses after the news and were down 1.9 percent at 24.97 euros by 1529 GMT, underperforming a 0.4 percent drop in German mid-cap index .MDAXI.

MOST DEMANDING YEAR

To cushion the impact of what Lahrs called one of the most demanding years for the industry, Hugo Boss closed underperforming stores and some showrooms, renegotiated contracts with suppliers, stopped delivering to high-risk customers in Eastern Europe, and pushed overseas expansion.

The full-year core operating profit margin stayed at 17 percent.

The suit maker posted a 6 percent drop in underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to 270 million euros on sales of 1.56 billion euros, down 7 percent.

Analysts on average expected core earnings of 222.05 million euros on revenue of 1.55 billion euros, according to Thomson Reuters I/B/E/S.

The company, in which private equity group Permira [PERM.UL] holds 88 percent of the voting rights, trades at about 15 times projected 2011 earnings, while Polo Ralph Lauren (RL.N), and Burberry (BRBY.L) are at a multiple of around 18, according to Thomson Reuters StarMine, which weights analysts' forecasts according to their track record.

Analysts blame lower visibility and sweeping management changes following the 2007 takeover by Permira for the discount.

For an analysis on Hugo Boss click on [ID:nLDE6100WG] (Reporting by Eva Kuehnen; Editing by Michael Shields and David Cowell)

archives Hugo Boss

02-08-2010	Permira stands by Hugo Boss
Permira will hold on to its investments in fashion house Hugo Boss and broadcaster ProSiebenSat1, the head of the buyout firm's German business told a magazine.
01-21-2010	Hugo Boss CEO says end of crisis is near
German premium fashion house Hugo Boss sees growing signs that the fashion industry has turned the corner and expects it to get back to past growth rates from 2011 as well-heeled shoppers splash out again.
01-06-2010	Hugo Boss closes its factory in Cleveland
After months of negotiations with unions, Hugo Boss has finally closed its factory in Cleveland, Ohio, thereby cutting 300 jobs. These job cuts will take place between now and April.
12-10-2009	Permira to keep Hugo Boss, ProSieben for years
Permira doesn't plan to exit from media company ProSiebenSat.1 and fashion label Hugo Boss for a couple of years, the German head of the private equity company said.
11-17-2009	Hugo Boss sees no full-year pickup before 2011
German fashion house Hugo Boss does not expect business to improve on a full-year basis before 2011 but plans to increase capital spending on opening new shops slightly next year.
11-02-2009	Hugo Boss gives gloomy outlook after weak third quarter
Hugo Boss gave a gloomy outlook for the rest of the year after its third-quarter operating earnings fell by almost a third and missed analysts' estimates, as consumers continued to shun high-end fashion.
10-01-2009	Hugo Boss: Graeme Black appointed as creative consultant for Boss Black Womenswear
Hugo Boss is paying particular attention to its Boss Black Womenswear line. Elegance, sophistication and precision of cuts have been stressed since the launch of the label in 2000, which will now be aided by Graeme Black who has joined the creative team in a consulting capacity.
07-30-2009	Hugo Boss keeps 2009 outlook after weak second quarter
Lower spending on extravagant suits and dresses led to a wider second-quarter operating loss at Hugo Boss but the German fashion house kept its outlook in place.
06-04-2009	Personnel changes in the managing board of Hugo Boss
Hugo Boss has announced that Christoph Auhagen has been appointed as a member of the managing board, as Chief Brand Officer. He will be responsible for the development and product-relevant control of Hugo Boss' brands.
05-04-2009	Andreas Stockert joins management board of Hugo Boss
Andreas Stockert has arrived at Hugo Boss. He joins the German group as Chief Operating Officer and is judged to be endowed with a “deep knowledge of logistics and supply chains” by Hellmut Albrecht, Chairman of the Supervisory Board.
04-30-2009	Hugo Boss Q1 operating profit eases, keeps outlook
Hugo Boss reported an 8 percent drop in first-quarter underlying operating profit on Thursday 30 April as demand for its suits and dresses eased amid the economic downturn.
04-09-2009	Ingo Wilts leaves Hugo Boss
Ingo Wilts, vice-president of Boss Black, Boss Selection and Boss Green, will leave Hugo Boss in the summer. This news was confirmed to FashionMag.com by the German group.
03-26-2009	Hugo Boss sees profitability gain in 2009
German fashion house Hugo Boss expects profitability to grow this year despite slowing sales, it said on Thursday March 26 after reporting better-than-expected 2008 earnings.
02-12-2009	Hugo Boss counts on own stores in crisis
German fashion house Hugo Boss will battle the economic slowdown by boosting the number of its own stores and using more flexible distribution to foster the brand's international presence.
01-22-2009	Vuitton and Hugo Boss upbeat on Christmas trade
Top European fashion houses Louis Vuitton and Hugo Boss (BOSG_p.DE) on Thursday said Christmas trading proved robust, sending a comforting message as the retail industry is hit by the worst downturn in decades.
10-30-2008	German retailer Hugo Boss cuts 2008 targets owing to slowdown
The German fashion company Hugo Boss said on Thursday, October 30 that its nine-month net profit had fallen and dropped its forecasts owing to the economic slowdown.
07-31-2008	German retailer Hugo Boss posts second-quarter loss
The German clothing retailer Hugo Boss said on Thursday, July 31st that its second-quarter results remained in the red but confirmed its full-year forecast.
05-15-2008	Dior CEO named head of German fashion house Boss
Claus-Dietrich Lahrs, the CEO of leading French fashion house Christian Dior Couture, was Thursday May 13th named head of German ready-to-wear company Hugo Boss, a statement from that company said.
05-14-2008	Dior CEO to lead German fashion house Boss: report
Claus-Dietrich Lahrs, the CEO of leading French fashion house Christian Dior Couture, will become head of German ready-to-wear company Hugo Boss, German daily Handelsblatt reported on Wednesday 14th.
03-19-2008	Hugo Boss accord guarantees jobs
Directors and staff at the German fashion retailer Hugo Boss have reached an agreement that guarantees jobs and German work sites, the private equity group that owns Hugo Boss said Wednesday March 19th.
03-18-2008	Staff and union slam Permira intervention at Hugo Boss
Tension is growing at Hugo Boss against its new owner, the British investment fund Permira, with some accusing it of pillaging the German fashion retailer that has lost a top director and is set to lose another.
03-18-2008	Hugo Boss supervisory board chief steps down early
German fashion retailer Hugo Boss said Tuesday March 18th that the head of its supervisory board would leave, with the news coming just a few weeks after the departure of its managing board president.
03-14-2008	Hugo Boss chairman to quit amid spat with Permira: report
The chairman of German fashion house Hugo Boss is about to resign amid a row with the company's owner, British private equity group Permira, the German weekly Wirtshaftswoche reported.
02-20-2008	Hugo Boss might pick Hans Fluri as next CEO: report
The German fashion house Hugo Boss might appoint Hans Fluri as interim head of the company to replace chief executive Bruno Saelzer who stepped down last week, a press report said on Wednesday February 14th.
07-24-2007	Hugo Boss eyes purchase of second brandname
German fashion house Hugo Boss may soon be on the look-out for acquisitions to grow and wants to buy a second brand name, the group's chairman Bruno Saelzer said in a newspaper interview published on Tuesday, July 24th.