CEO Daniel Grieder wants to open the fashion manufacturer to new target groups.
(Photo: Bloomberg)
Stuttgart, Dusseldorf The German fashion group Hugo Boss has raised its sales target for 2025 from four to five billion euros. The company announced this on Thursday. The operating result (EBIT) should increase to at least 600 million euros, which would correspond to a return on sales of twelve percent.
“We have everything we need to continue our success story,” said CEO Daniel Grieder, who has been running the company for two years.
Bankruptcies in the retail sector, such as Peek & Cloppenburg, inflation, an uncertain economy: where others have problems, Hugo Boss keeps the pace. After years of stagnation, Grieder continues to work unimpressed on the comeback story at Germany’s most important fashion manufacturer. The investors and investors like the Marzotto family or the British Fraser Group benefit. Since the beginning of the year, the share price has risen by almost 30 percent to 70 euros.
Hugo Boss wants to achieve sales of four billion euros by 2023
At the start of trading on Thursday, the papers were hardly changed. Analysts had expected the target to be raised, since the original sales target will probably be achieved this year, two years earlier than planned. Grieder had already increased the annual forecast for 2023 at the beginning of May.
After a sales increase of 25 percent to 968 million euros in the first quarter, the manager had announced a jump of ten percent to almost four billion euros for the current year instead of growth of four to six percent. Grieder believes that an increase of 20 percent to 370 to 400 million euros is possible for the operating result this year.
The Hugo Boss boss puts a lot of money into marketing.
(Photo: IMAGO/GlobalImagens)
The German fashion industry is currently experiencing a wave of insolvencies among retailers and manufacturers. But Boss has significantly expanded market share and relevance through its brand renewal, explained Grieder.
The Metzingen-based company has long been known primarily for its upscale fashion and men’s suits. However, the 61-year-old Swiss Grieder, who joined from Tommy Hilfiger in June 2021, has opened up the Boss and Hugo brands to a wider audience and is primarily targeting young people with his repositioning of the brand. For Grieder, more leisure fashion for the party scene is just as important as more sustainability.
In sales, he has returned to fashion retail and is aiming for multiple placements in department stores with sub-lines such as Orange and Green.
>> Read the interview with Daniel Grieder: “Hugo Boss looked like fruit salad in the shops”
The growth is flanked by a marketing firework. In the first quarter, Grieder spent 90 million euros on it. That was twelve percent more than in the previous year and corresponds to 9.3 percent of sales. Between seven and eight percent should be put into marketing all year round.
The money was spent among other things in January on the second campaign by New York creative Trey Laird. In March, Boss hosted a show in Miami, currently the hotspot for fashion and the luxury industry. Grieder also revised the logo and hired Naomi Campbell, Khaby Lame and Kendall Jenner, among others, as testimonials.
New digital campus in Porto
Grieder intends to continue investing heavily in marketing and digitization. “The higher gross margin of between 62 and 64 percent will more than compensate for additional investments in the business,” Grieder is certain. In order to become more accurate, the manager relies on digital trend recognition, product development, AI-supported pricing and a presence in the metaverse.
Two weeks ago, the company inaugurated its digital campus in Porto. There, intelligent data analysis should generate noticeable increases in efficiency along the value chain. 150 experts are currently working there in a joint venture that Hugo Boss will take over completely in 2026. So far, a two-digit million amount has already been invested.
Grieder had once again approached the wholesale trade more closely. Now the company’s own branch network is to be expanded again. 30 points of sale are to be added in the coming years. The number of franchise stores is to be increased from 300 to around 500 in the coming years. Overall, the company wants to increase sales in stationary wholesale from one to around 1.3 billion euros by 2025.
The digital business is also expected to grow in double digits in the coming years, with the sales target remaining unchanged at more than one billion euros by 2025. “We have unchained our potential,” announced Grieder.
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