Fashion label Hugo Boss considers closing stores as profit suffers biggest drop in 6 years

A Hugo Boss store logo at a shopping centre outside Moscow, Russia.
A Hugo Boss store logo at a shopping centre outside Moscow, Russia. PHOTO: REUTERS

FRANKFURT (BLOOMBERG) - Hugo Boss, the embattled German fashion retailer, reported its biggest drop in quarterly profit in at least six years as costs increased and it considers shrinking its store network.

Earnings before interest, taxes, depreciation and amortisation and other items declined 29 per cent to €93.5 million (S$144.9 million) in the first quarter, the company said in a statement on Tuesday (May 3). The average analyst estimate was €96 million.

Sales fell 4 per cent to €643 million, compared with analysts' €647-million estimate.

The company said in coming months it will decide whether to close some of its shops.

The German fashion label, best known for men's apparel such as suits and jackets, is struggling with lacklustre luxury demand in Asia and discounting in the US that has led to cuts in its profit outlook and cost former chief executive officer Claus-Dietrich Lahrs his job this year.

The shares have lost about half their value over the past year.