Hugo Boss says profits tailor made for 10pc rise
HUGO Boss, the German luxury clothing maker controlled by buyout firm Permira Advisers, yesterday said operating profit may rise by more than 10pc this year as revenue increases.
The clothes company added that profit after tax soared 53pc to €284.5m last year while sales increased 19pc to €2.06bn. Capital expenditure will be higher than last year as the chain invests in opening and renovating stores.
"The first two-and-a-half months of 2012 have been very satisfactory," chief executive Claus-Dietrich Lahrs said.
Mr Lahrs said changes to the company's share structure announced earlier this week will bring the structure "in line with our global aspirations" and attract international institutional investors.
"The proposed conversion of the preferred shares into ordinary shares will lead to a higher trading liquidity in the stock and positive effect on the weighting of Hugo Boss shares," Herbert Sturm, an analyst at DZ Bank, said yesterday.
Hugo Boss said in its annual report that it still forecasts revenue of €3bn and Ebitda of €750m in 2015 as it opens more shops and increases sales in Asia and the US.
The clothing retailer, which currently gets the majority of sales from wholesaling, has said the retail business will represent about 55pc of revenue by 2015 as it opens about 50 stores a year.
The main thrust for growth will be Asia, and more specifically China, chief financial officer Mark Langer said last month. Hugo Boss plans to open as many as 20 stores a year in China and expects sales in Asia to represent more than 20pc of group sales by 2015, compared with 13pc at the end of 2010. The retailer opened 28 stores in China in 2011.
Lahrs said at a press conference he was "not surprised" by a "temporary" slowdown in China. The retailer's growth story in the country is "intact". The executive sees strong growth in Germany, the UK and France this year. (Bloomberg)