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Pandemic Hit To Business To Get Worse Before Recovering, Expects Hugo Boss


05/06/2020


Pandemic Hit To Business To Get Worse Before Recovering, Expects Hugo Boss
While reporting a 17 per cent drop in sale in the first quarter, the German fashion house Hugo Boss said that it expects the economic and business impact of the novel coronavirus pandemic to get worse before businesses are able to revive. The company however added that signals of e rebound in business in China were evident to it. It also reported some growth in its online business.
 
The revenue from sale for the first quarter for the company was at €555 million which was higher than the average analyst forecasts of revenues of €548 million. But even with the strong revenues, the company reported a loss before interest and taxation of €14 million which was more than double of what analysts were expecting at a loss of €6 million.
 
The company forecast its expectations of a drop of at least 50 per cent in its second-quarter sales revenue. However it expressed confidence that there will be a gradual improvement in the retail business environment starting from the third quarter and there would be a growth in sales and earnings during the second half of year.
 
Since the end of March, all of the company’s own retail stores and concessions have reopened in Chinese market, said Hugo Boss, known for its smart men’s suits, and added that the sale for the month of April in the market was just 15 to 20 per cent lower than what the company had witnesses in the same month a year ago.
 
Similar comments were made by the luxury player Hermes, which reported evidence of strong pick up in its business in China following the reopening of shops.
 
In the first quarter, there had been a growth of 39 per cent in the revenues from online said, Hugo Boss said, which also grew further in the month of April. The company said that sale of its products through its own website as well as through e-commerce and partners sites had more than doubled in April. 
 
A slow of cost curtailment measures to conserve cash amid the coronavirus pandemic, such as a temporary stop to all store renovations and new openings as well as and reducing the inflow of stock, were implemented by the company already. The company said that additional savings in expenditure to the tune of at least €150 million was being targeted by it for the entire year.
 
The company said the among the major measures will be reducing the inflow of inventories by at least €200 million compared to its original plan. That will also include reduction in its own production output. 
 
In March, the company had announced that its chief executive Mark Langer would leaving the company on September 30 but will be retained by the company as a consultant till the end of the year because of the coronavirus pandemic crisis, during which time a successor to the position will be sought out by the company.
 
(Source:www.irishtimes.com)