Hugo Boss expects sales to double in second quarter

Friday, 21 May 2021 00:00 - - {{hitsCtrl.values.hits}}

BERLIN (Reuters): German fashion house Hugo Boss saw first-quarter sales almost double in mainland China, and its casualwear business returned to growth, predicting a rebound in the rest of the business in the course of 2021 as COVID-19 lockdowns ease.

The company known for its smart men’s suits said on Wednesday it is confident that sales in the second quarter will almost double, and it hopes to generate a positive operating profit in the period, although it cannot give a precise outlook.

Hugo Boss did not comment on the impact of a boycott of Western brands by Chinese consumers launched in late March over Western accusations of forced labour in Xinjiang.

At least three Chinese celebrities said in March they were dropping Hugo Boss, and some internet users vowed to boycott the brand for good.

China is a key growth market for Hugo Boss. Compared with the first quarter of 2019, a year before the coronavirus pandemic hit the region, currency-adjusted sales rose by 29% in mainland China in the quarter.

Overall, group sales fell 10% to 497 million euros ($ 597 million), while Hugo Boss just managed to turn an operating profit of 1 million euros, ahead of average analyst forecasts for 442 million and a loss of 28 million respectively.

The company said sales of casualwear returned to mid-single-digit growth, and online sales jumped 72%.

Shares in Hugo Boss jumped last month on speculation of a possible bid for the company after British media cited an interest in the company, including from French luxury group LVMH.