Hugo Boss Sees Q4 Sales Fall 29% Amid ‘Challenging’ Year

March 11, 2021

Hugo Boss reported double-digit decreases across its balance sheet in 2020. Although the German firm saw some recovery at the end of the year in important markets like China, this wasn’t enough to stave off a 29 percent decrease in Q4 revenues to 583 million euros.

Hugo Boss, which had pushed its more casual offerings during the pandemic, suffered not just from the fact that stores were locked down and offices were closed, but also that special events – for which consumers might purchase a new suit or formal outfit – were cancelled.

Sales fell 33 percent over the course of 2020 to 1.95 billion euros, compared to 2.88 billion euros in 2019.

In a statement, the spokesperson for the board of Hugo Boss, Yves Müller, described 2020 as “undoubtedly a challenging year.”

Stores in the company’s all-important home market, Europe, had partially closed again in the last three months of the year, scuppering the gradual recovery seen there in the third quarter. Sales on the continent, where the brand does the most business, dropped 32 percent, currency neutral, over the quarter to hit 327 million euros.

In North America, sales slid 28 percent to 110 million euros in Q4.

Mainland China provided a significant bright spot, with Q4 sales there climbing 24 percent. Unfortunately that wasn’t enough to compensate for decreases in other areas of the Asia-Pacific territory and the quarter ended on a 3 percent dip to 124 million euros.

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For the full year, sales fell 32 percent in Europe and 45 percent in the Americas. China grew 5 percent, but Asia-Pacific overall ended the year 22 percent down.

E-commerce progressed substantially over the year. The company’s website expanded sales in 32 countries and online sales rocketed up 49 percent, currency adjusted, over the year, allowing Hugo Boss to surpass 200 million euros worth of online sales for the first time.

Because of the pandemic, Hugo Boss had been pushing toward more casual wear over the year – for example, entering into partnerships with sportswear brand Russell Athletic and sponsoring basketball players. This was reflected in slight differences between the company’s two brands: Boss, which is focused more on formalwear and makes up a much larger proportion of the business, and Hugo, which is the more casual line.

In the fourth quarter, Hugo sales declined 26 percent to hit 81 million euros, while Boss sales fell 30 percent to total 502 million. For the year, Hugo sales fell 28 percent while Boss sales dropped 33 percent.

The brand’s EBIT came to minus 236 million euros. In 2019, it had been positive, at 344 million euros. However, the fourth quarter of 2020 did indicate some slight recovery. Although EBIT had fallen 89 percent in the fourth quarter, it was positive – sitting at 13 million euros.

Despite all the double-digit decreases, Hugo Boss emphasized the positive – cost management that led to a positive EBIT in Q4, the recovery in China and online sales, the focus on casual wear – in its statement announcing the results.

The company predicted “that the global retail environment will gradually improve over the course of 2021, starting with the second quarter” and that its numbers for 2021 would end up significantly higher than those for 2020.