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Smarter Dressing in Store for Hugo Boss as Lockdowns Lift

An employee displays suits at the Hugo Boss section of the Central Universal Department Store (TsUM), on the first day after ending a coronavirus lockdown, in Kyiv, Ukraine January 25, 2021. REUTERS/Valentyn Ogirenko
An employee displays suits at the Hugo Boss section of the Central Universal Department Store (TsUM), on the first day after ending a coronavirus lockdown, in Kyiv, Ukraine January 25, 2021. REUTERS/Valentyn Ogirenko
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Smarter Dressing in Store for Hugo Boss as Lockdowns Lift

An employee displays suits at the Hugo Boss section of the Central Universal Department Store (TsUM), on the first day after ending a coronavirus lockdown, in Kyiv, Ukraine January 25, 2021. REUTERS/Valentyn Ogirenko
An employee displays suits at the Hugo Boss section of the Central Universal Department Store (TsUM), on the first day after ending a coronavirus lockdown, in Kyiv, Ukraine January 25, 2021. REUTERS/Valentyn Ogirenko

Hugo Boss expects its business will continue to suffer in the first quarter but forecast a gradual recovery from April as people buy new clothes when they emerge from lockdowns.

Although the German fashion house said on Thursday it would continue to push more casual styles, helped by a new partnership with actor Chris Hemsworth, it noted pent-up demand for smart clothes seen in China after lockdowns were lifted there.

Hugo Boss had already made the shift toward casual clothing even before customers switched suits and ties for tracksuits when lockdowns forced them to work from home.

Formalwear only accounted for 25% of sales in 2020, down from 35% in 2019, acting Chief Executive Yves Mueller said.

"There is a desire in the population in many countries to go out again, to shop again," he told reporters, adding that Hugo Boss was responding to the trend for more comfortable clothes by using more stretchy materials, even in its suits.

About 30% of stores were still closed globally in the first quarter, but Hugo Boss hopes for a gradual recovery from the second quarter as vaccinations pick up and lockdowns are eased.

Mike Ashley-led Frasers said in January it had increased its Hugo Boss stake to 15.2%, part of the British businessman's drive to take the sportswear retailer upmarket.

Mueller said he was not aware that Hugo Boss, which expects sales and operating profit in 2021 to be "well above" the level of 2020, could be a takeover target.

Hugo Boss shares were down 2.3% at 0916 GMT, making them one of the biggest fallers on the German mid-cap index after it reported a 29% slump in fourth-quarter sales to 583 million euros ($695 million). It still managed to record a positive operating profit of 13 million euros as it cut costs.

Hugo Boss said its business continued to recover in the US market and Asia/Pacific, with China recording strong double-digit growth. Rival Burberry has also seen a strong bounce back in demand in China and South Korea.

Online sales at Hugo Boss grew fast, up 49% in 2020 to more than 200 million euros as the brand expanded e-commerce to 32 more markets. Mueller expects online sales above 300 million euros in 2021 and 400 million euros in 2022. ($1 = 0.8385 euros)

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Fashion

The $10 Mn bag: Original Birkin Smashes Records at Paris Auction

The "Birkin" bag and its owner. ALAIN JOCARD, Gilles LEIMDORFER / AFP
The "Birkin" bag and its owner. ALAIN JOCARD, Gilles LEIMDORFER / AFP
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The $10 Mn bag: Original Birkin Smashes Records at Paris Auction

The "Birkin" bag and its owner. ALAIN JOCARD, Gilles LEIMDORFER / AFP
The "Birkin" bag and its owner. ALAIN JOCARD, Gilles LEIMDORFER / AFP

The first-ever Birkin bag designed by French luxury brand Hermes for celebrity Jane Birkin sold for 8.58 million euros ($10 million) at a Sotheby's auction in Paris on Thursday, smashing previous price records for a handbag.

The modern design classic, owned by a Paris-based handbag collector, sparked a telephone bidding war up to seven million euros, with the final sale price set at 8.58 million with commission and fees, the Sotheby's website showed.

"After weeks of anticipation, the bidding opened at 1 million euros — prompting a gasp from the room," Sotheby's said in a statement.

The final buyer, who eclipsed eight other rivals, was a "private collector from Japan", the auction house added, without giving further details.

The previous record price for a handbag at auction was set by a diamond-encrusted crocodile skin Hermes Kelly 28, which fetched $513,000 in 2021 at Christie's in Hong Kong, AFP said.

Sotheby's had advised that the Birkin prototype was expected to beat that level during its sale.

But the staggering price tag for a well-worn item is in keeping with the fashion world's recent flashy aesthetics.

After years of so-called "quiet luxury" dominating catwalks, designers have embraced more ostentatious looks in recent seasons that have been dubbed "boom boom" by some trend forecasters.

Modern-day Birkin bags are offered by Hermes to loyal clients, with prices starting at around $10,000.

'Nostalgic'

The original Birkin has changed hands twice since being put up for sale by Birkin at an auction in 1994 where the proceeds went to an AIDS charity, according to Sotheby's.

Thursday's sale represents an extraordinary pay day for owner Catherine Benier, who has a boutique in the upmarket 6th district in Left Bank Paris.

She said she was "astonished at the result" in a statement sent by Sotheby's.

"I’m already very nostalgic at the thought of knowing the bag is no longer mine but extremely happy it has found a new loving home," she added.

She told The New York Times before the sale that the bag, which she bought at auction 25 years ago, was the "jewel in my collection".

The bag is now the second-most expensive fashion item ever sold at auction, Sotheby's said.

The record was established by a pair of ruby red slippers worn by actor Judy Garland from The Wizard of Oz in 1939, which sold for $32.5 million in 2024 in Dallas, Texas.

'Many years of use'

The birth of the Birkin bag has become a modern fashion legend.

During a Paris-London flight, the singer and film star -- who died in 2023 -- complained to fellow traveler Jean-Louis Dumas, then head of Hermes, about not being able to find a bag suited to her needs as a young mother.

The result of their conversation was a spacious tote with room for baby bottles, created in 1984 and named the Birkin.

The protoype, which Birkin regularly carried with her and customized with stickers, is engraved with the initials J.B. and has several unique features, including closed metal rings, a non-detachable shoulder strap and a built-in nail clipper.

Its condition "reflects the many years of use by the actress and singer", Sotheby's said beforehand.

A slightly differently sized version of the original has become the flagship product of the immensely profitable family-owned Hermes ever since.

Produced in very limited numbers, the bag has maintained an aura of exclusivity and is beloved by celebrities from the Kardashians, Jennifer Lopez to Victoria Beckham.

Frustrated fashionistas in America even sued Hermes in a class-action suit in California last year after they were refused access to the bags.

The former wife of French singing legend Serge Gainsbourg championed a host of causes, including animal rights.