Hugo Boss, the renowned German fashion group, has recently named Heiko Schäfer as its new Chief Operating Officer (COO). Schäfer will not only join the executive committee of the company but will also have the responsibility of overseeing sourcing, manufacturing, product development, operations, and sustainability. Prior to joining Hugo Boss, Schäfer held the position of general manager at Tom Tailor, a popular German fashion label. He also has a significant background in senior positions at Adidas and Boston Consulting Group.
Apart from this appointment, Hugo Boss has also announced its financial results for the 2019 fiscal year. The company witnessed a 2% growth in revenue, reaching €2.9 billion at constant exchange rates. This growth can be attributed to the company’s investments in e-commerce, particularly through its own online store and collaborations with vendors. In fact, online sales for the group experienced a remarkable surge of 35%, amounting to €151 million.
Despite the growth in revenue, Hugo Boss faced a decline in operating income and net income. Operating income dropped by 4%, totaling €333 million, while net income slumped by 10%, amounting to €212 million. This decline primarily resulted from higher operating costs.
Analyzing the geographical performance, Hugo Boss saw a 5% surge in sales in the Asia-Pacific region, reaching €438 million. Mainland China specifically witnessed strong double-digit sales growth. The company currently operates 150 stores in mainland China, Hong Kong, and Macao. Unfortunately, the outbreak of the coronavirus has severely impacted Hugo Boss’s operations in China, resulting in the closure of half of its stores in the country. This is anticipated to cause a significant decline in sales.
In summary, Hugo Boss’s financial results for 2019 highlight the company’s struggles and opportunities in an evolving fashion retail landscape. With the appointment of Heiko Schäfer, the brand aims to enhance its sourcing, manufacturing, and operational procedures in order to drive future growth. Moreover, the impact of the coronavirus on sales in China underscores the importance of diversifying revenue streams and adapting to changing market conditions. As Hugo Boss continues to tackle these challenges, it will be crucial for the company to concentrate on its e-commerce investments and explore new avenues for growth in different regions.