Hugo Boss on Thursday raised its sales target from 4 billion euros to 5 billion euros by 2025, fueled by an ongoing, star-studded marketing campaign as the brand transforms from a men’s formalwear specialist to a 24-7 lifestyle house.
“It was the right strategy at the right time, and will enable us to reach our mid-term financial ambition of 4 billion euros already this year, two years ahead of plan,” chief executive officer Daniel Grieder said in a statement.
The company credits Grieder’s two-year-old strategy, called Claim 5, with restoring its fortunes and said the rapid uptick in sales “will more than compensate for increased overheads.”
By 2025, Hugo Boss also forecasts that EBIT will hit 600 million euros, instead of the previously target if 480 million euros.
Higher margins on clothing will also help, analyst Manjari Dhar from Canada’s RBC added in a note on Thursday. The German stock market offered only mild reactions to the news, with Hugo Boss shares rising slightly before falling back again.
Although Europe remains Hugo Boss’ biggest market, the company has seen particularly strong sales growth in the Americas, executives said.
Despite weaker-than-predicted consumer demand, “we generally see a very robust growth in our U.S. business, also in the first quarter, but especially now with the repositioning of Hugo Boss as a 24-7 lifestyle brand,” Grieder told journalists at an online press conference.
High-profile marketing combined with more e-commerce has brought Hugo Boss new customers, particularly from younger age groups, and has allowed the company to combat any headwinds, Grieder noted. The company expects sales in the Americas to be worth 1 billion euros by 2025.
The Asia-Pacific region should also see similar sales levels by 2025. Executives said a Chinese-led sales team is allowing the German brand “to get closer to customers.” The addition of a new clothing line called Boss Camel has also been very popular with status-conscious Chinese consumers. Despite the fact that it was only introduced at the end of last year, the more upmarket Camel line, posited on the idea of “affordable luxury,” already makes up almost a quarter of Hugo Boss sales in that territory.
Hugo Boss also plans to further streamline its logistics and supply processes.
This story was reported by WWD and originally appeared on WWD.com.
