Permira sell-off sparks Hugo Boss stock slump

SHARES in Hugo Boss dived yesterday after Permira’s decision to cash in some of its shares sparked fears the private equity group would offload the rest of its stake in the German fashion house.

Hugo Boss closed down 6.36 per cent at €67.98 after holding company The Red & Black, controlled by Permira, said it would sell 4.5m preference shares, or 6.4 per cent of the total share capital.

Joerg Rockenhaeuser, head of Permira Germany, denied the deal was the start of an exit from the firm, which recently posted a surprise 30 per cent rise in quarterly profit. “Hugo Boss has continued to perform very strongly under the leadership of CEO Claus-Dietrich Lahrs,” he said.

Rockenhaeuser has previously insisted there is no direct link between the 2015 date for the Hugo Boss business plan and an exit date for Permira.

Yesterday’s deal means Red & Black will still hold 66 per cent of Hugo Boss’ capital and control 89 per cent of its voting rights. Citigroup has been mandated as bookrunner for the sale.

Permira has made a commitment not to sell any more of its shares in the retailer for the next six months.

The buyout firm took a stake in Hugo Boss in 2007 as private equity piled into the booming luxury goods sector in China, India and Russia.