Profit at the UK arm of Hugo Boss, which counts Mike Ashley’s Frasers Group as a major shareholder, has been slashed for a second consecutive year.
The London-headquartered division of the German group has posted a pre-tax profit of £9m for 2024, down from the £16.8m it achieved in 2023 and £30.4m in 2022.
New accounts filed with Companies House also show the brand’s turnover declined from £391.6m to £377m in 2024.
Hugo Boss’ turnover had stood at £402.4m in 2022.
The firm’s wholesale turnover increased in 2024 from £131.5m to £134.5m but its retail sales fell from £204.2m to £188.2m and its online takings dipped from £55.9m to £54.2m.
For the year, Hugo Boss has recommended a dividend of £9.3m, down from the £26.9m it paid out in 2023 and £16.3m in 2022.
‘Significant investments’ hit Hugo Boss profit
A statement signed off by the board said: “Despite the challenging macro-economic environment within the UK retail industry, the company met management’s expectations per the latest outlook.”
Hugo Boss added that its operating profit declined from £19.7m to £15.1m “directly as a result of the significant investments made during the year to support the company in achieving its ‘Claim 5’ targets.”
The business also said: “In 2024, the company intensified the build up of the new operational model of receiving direct deliveries from suppliers as opposed to the previous central distribution centre model.
“The company also continued its investment in people to support the new operational model accordingly.
“The company also continued to invest in the elevation of its store portfolio with the renovation of six Boss stores which were Belfast, White City, Gatwick North Terminal, Heathrow Terminal 5, Gretna and London Brent Cross. A new Boss store has also been opened in Heathrow Terminal 3.”
On its future, Hugo Boss said: “The company continues to explore opportunities for new retail stores in markets with our desired demographic, invest in its portfolio, focus on key performance indicators to drive productivity, and maximise profit opportunities within our distribution channels.”
Mike Ashley’s empire tightens grip on brand
The results come after City AM reported in July that Mike Ashley’s Frasers Group had tightened its grip on Hugo Boss after upping its stake.
The owner of Sports Direct and House of Fraser increased its shareholding in the German giant to in excess off 32 per cent.
In a statement released at the time, Frasers Group said it “continues to consider the acquisition of shares Hugo Boss AG as a strategic investment”.
It added that the group is not ruling out the possibility of buying further shares over the next 12 months but said it depended on market and company developments.
The 2024 results for Hugo Boss’ UK division have also been published after the wider group revealed its sales had stalled during the first half of its current financial year.
In results revealed in August, the group said it expects its full-year sales to “remain broadly stable”.