Stuttgart Seldom has a change of boss in the fashion industry caused as much attention as that of Daniel Grieder from Tommy Hilfiger to Hugo Boss. And seldom before has a fashion company had to wait so long for its new boss: The non-competition clause expired on June 1 of this year.
The expectations could not be higher: With Tommy Hilfiger, Grieder had overtaken Hugo Boss. Now, in turn, Grieder has big plans for the Swabian fashion company. The top manager, who is about to turn 60, wants to do a late job in Metzingen and trim his new employer for growth with a rejuvenation cure for the brand.
For this he wants to dig deep into his pocket. For the expansion of the online business and the renewal of the stationary retail trade alone, he intends to take 500 million euros into his hands in the coming years. In addition, Grieder wants to spend 100 million euros on marketing and 150 million euros on digitization, from which he particularly hopes. At the same time, the manager wants to make the Hugo and Boss brands much more modern in order to appeal to more young people.
As deep as the cut from Corona was, Grieder can now look forward to the initial tailwind in his first months at Germany’s largest fashion company. 95 percent of the shops have already reopened. After reopening, the fashion retailer benefited in the third quarter from the fact that customers were craving new clothes again after the lockdowns in the pandemic.
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The consolidated profit rose to 53 million euros, after four million in the corona-related weak period of the previous year, as the company announced on Thursday when it presented its final figures. Compared to the same quarter of the pre-Corona year 2019, the operating result (EBIT) rose by three percent to 85 million euros.
In the United States, Hugo Boss doubled sales
Especially the problem child USA seems to get the new Swabian under control again. Adjusted for currency effects, sales there doubled. A more substantial comparison with the level of the third quarter of 2019 still shows an increase of 14 percent. Business in Europe was also much better.
Whether business, classic or casual – the times when the exclusive Hugo Boss collections were spurned seem over for the time being. In the third quarter, Hugo Boss was able to increase sales and earnings for the first time compared to the pre-pandemic level.
“At the same time, we have made the first major progress in successfully implementing our CLAIM 5 strategy, especially in strengthening our brands among younger target groups,” says Grieder. “The launch of our second collection by Boss and Russell Athletic is an example of how together as a team we can fully exploit the great potential of our brands.”
The marketing guru had a lot of time in the transition period before his move to think about strategic ideas and presented them brilliantly in an online conference at the beginning of August. Sales are expected to double to four billion euros by 2025. The CEO, who has been in office since June, is aiming for an EBIT margin of around twelve percent by 2025. Even if no major spectacular decisions are known yet, Grieder is already toying with the acquisition of further brands.
Investors are happy about the price increase
It comes as no surprise that Hugo Boss is back on track operationally. In mid-October, the Swabians had already communicated the increase in sales by 42 percent to 755 million euros in the third quarter and also increased the annual forecast for EBIT from a maximum of 175 million euros to up to 200 million euros. Last year Boss posted a loss of 236 million euros with a meager 1.9 billion euros in annual sales. For the current year, the company is forecasting a currency-adjusted increase in sales to 2.7 billion euros.
Investors have long since praised the new Boss savior Grieder with advance praise. After the share slipped to 19 euros during the pandemic, the price has been continuously above 45 euros since Grieder took office at the beginning of June and is now at 55 euros. Another two euros and the stock market value of Hugo Boss has tripled since the low point.
In any case, Grieder’s commitment has already paid off for investors. Up to the highs of over 110 euros, however, there is still air. The imagination of the most optimistic analysts only goes up to 70 euros for the time being.
More:“Younger and more relevant”: How Hugo Boss’s new CEO wants to double sales