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Hugo Boss adopts Zara focus to revamp its fashion offerings
HUGO Boss is taking a cue from Zara owner Inditex to further its transition from conservative suitmaking towards a faster-fashion model.
The German clothier said it would sharpen its focus on consumer trends by speeding up production, personalising its clothes more and boosting e-commerce. The stock rose as much as 2.9 per cent in Frankfurt.
Hugo Boss is trying to dispel the fashion mistakes that dogged performance in 2015 and 2016. Sales growth should average 5 per cent to 7 per cent excluding currency movements over the next four years, the retailer said.
"The challenge is recruiting younger consumers," wrote Piral Dadhania, an analyst at RBC Capital Markets.
Speed has become crucial not only for fast-fashion makers like Inditex's Zara but also the premium end of the clothing market. Hugo Boss replaced its chief executive officer in 2016 and since then, successor Mark Langer has been focusing the suitmaker on casualwear. Yves Mueller joined as chief financial officer this year.
Mr Langer and Mr Mueller also set a goal for an operating margin of 15 per cent by 2022.
Hugo Boss plans to depend more on Asian growth, where it forecasts sales to rise at least 10 per cent a year through 2022, particularly in China. The region makes up 15 per cent of the company's sales now.
The Metzingen, Germany-based company forecasts its own e-commerce revenue to quadruple by 2022. BLOOMBERG