Hugo Boss Sales Decline In Chinese Market

As early as 1994, Hugo Boss entered the Chinese market. Its business model in China, like many other luxury brands, has been handed over to the agents to operate franchises.

The European market is still weak, and Asian markets haven't seen any immediate changes after a series of strategic changes.

German luxury group Hugo BossAG (BOSSN.DE) recently announced its first quarter results. The latest quarterly report shows that the net profit of the old German company, which started with men's wear, fell 7.4% to 75 million 600 thousand euros, much less than the 82 million euros expected by the market. The company pointed out that Europe's consumption intention remained weak in the first quarter. In the Chinese market, its sales fell by 3% due to the difficult conditions of the industry and the slowdown in macroeconomic growth.

Over the past two years, many luxury brands have declined in the domestic market under the influence of the big environment. Hugo Boss is no exception. In response, the company is working hard to adapt to market changes and constantly adjust its strategy.

"This will make Hugo Bosss a step closer to the goal -- enhancing brand awareness and full channel transformation." The analysts believe that.

In addition, in 2014, Hugo Boss invited the US first lady's designer to run the women's costume design team. For the old luxury goods company that starts with men's clothing, women's wear and accessories will become the growth point of the brand in the future, and the Asian face of the designer may be a selling point.

However, from the current situation, it is difficult to see in the short term from the financial statements that Hugo Boss is clearly improving its performance because of its Asia and Middle East strategy. In fact, the whole Asian market It accounts for only 13% of the total sales volume of Hugo Boss.

Not long ago, Goldman Sachs lowered its growth expectations for Hugo Boss and recommended that customers sell shares. Hugo Boss's former holding European private equity fund Permira Holdings Ltd. also made third reductions in Hugo Boss in December last year.

HugoBoss has planned to exceed 3 billion euro mark in 2015. According to the current situation, this goal should be postponed to at least 2016. Just like its Claus Dietrich Lahrs "In the light of economic and political uncertainties, 2015 will not be easy," he said.

In 2014, Hugo Boss The group announced the acquisition of 40% stake in the joint venture from the Macao rainbow group, a franchise retailer, to directly control its Hugo Boss stores in mainland China and Macao. In an interview with the media, CEO Claus Dietrich Lahrs said that Hugo Boss is opening more new stores in Asia and the Middle East and reclaiming distribution rights in China and South Korea. "Our global growth strategy is to expand brand influence and manage retail channels ourselves." Lahrs added that "the recovery of the distribution rights of the two countries means further strengthening the layout of these key markets."