Hugo Boss sees demand for suits despite home working
German fashion house Hugo Boss expects demand for suits and formal wear to return as coronavirus lockdowns ease even as it adjusts to the rising popularity of casual styles after sales tumbled 59% in the second quarter.
"People will still get married and hold confirmations or baptisms and people still want to meet up," acting chief executive Yves Mueller told journalists, adding he saw pent-up demand for formal outfits for events postponed by lockdowns.
Hugo Boss reported quarterly revenue of 275 million euros ($323.5 million), missing an average analyst forecast for 288 million, while its operating loss of 124 million euros was ahead of consensus for a loss of 133 million.
Shares in the company, down 47% this year, were up 1.7% at 0812 GMT.
The company known for its smart men's suits already makes more than half of its sales from sports wear or casual styles, Mueller said, adding that customers were also increasingly mixing and matching casual and formal garments.
In the second quarter, products like T-shirts, polo shirts, trousers and lounge wear proved more resilient than formal wear.
"We are convinced that ready-to-wear will come back after the pandemic," he said, shrugging off predictions that many people will keep working from home even after the pandemic.
Mueller is holding the fort after Mark Langer stepped down as chief executive. Daniel Grieder, the former CEO of Tommy Hilfiger Global & PVH Europe, is due to take over next June.
Sales rose 4% in the quarter in mainland China, including double-digit growth in June, a similar trend to that reported by LVMH, the world's biggest luxury goods group, which said last week that momentum had especially improved in China.
By contrast sales fell 59% in Europe and 82% in the Americas, with unrest and demonstrations in the United States in May and June putting more strain on its business.
The company expects a gradual improvement for the second half of 2020, but declined to provide a full-year forecast.
Men's Wearhouse owner Tailored Brands TLRD.N filed for bankruptcy on Sunday, after it was hit by the collapse in demand for office attire.