German Luxury Goods Boss Net Profit Plunged 22.8% Asia Pacific Market Suffered Heavy Losses

German luxury Boss entered the Chinese market as agent in the early 1994. China's macroeconomic slowdown and anti-corruption actions have an impact on the luxury market. Hugo Boss group has taken a lead in the Chinese market.

Weakness in the US and China markets

The expansion of giant Hugo Boss slowed down.

Recently, the Hugo Boss group released its three quarter results as of September 30, 2015, showing that group sales fell 1% to 744 million euros compared with the same period last year, net profit plunged 22.8% to 88 million 500 thousand euros, and the Asia Pacific market, led by China, suffered a heavy blow, with the battalion falling 12%.

Data show that

In the three quarter, sales in Europe increased by 4%, accounting for 60%.

Sales in the Asia Pacific region and the Americas declined sharply.

Among them, the Chinese market sales increased from 6% in the two quarter to negative growth, or two digits.

Sales in the United States also fell from positive to negative, reaching 10%.

From the point of view of the channel, online sales grew rapidly, and the three quarter increased by 20%.

Thanks to the good development of the line, the total retail channel grew by 6% in the three quarter, but wholesale business fell 7% year-on-year.

Hugo Boss group said that the situation of the fashion retailing industry is deteriorating. The slowdown in China's macro-economic growth and the weakness of us tourism consumption have a great impact on the group's performance.

Cheng Weixiong, general manager of clothing industry expert and Shanghai Liang Qi Brand Management Co., Ltd., in an interview with reporters, said that China's macroeconomic slowdown and anti-corruption actions had an impact on the luxury market.

Hugo Boss is facing both the weak market environment and the impact of the customized brand. With the domestic price difference, the development prospect of the brand in China is not optimistic.

Reporters learned that Hugo Boss group entered the Chinese market in the form of agency in the early 1994, started in the Chinese cloth store in 2009, achieved 57% growth in China in fiscal year 2011, and accelerated expansion thereafter, but the group began to decline in the 2013 year financial year in the Asia Pacific region dominated by China.

Although the Group executives have repeatedly expressed the need to speed up the expansion in the Chinese market, the total sales volume of Chinese business in the group is only about 10%, which is still lower than that of other luxury brands.

Utah International

Yang Dayun, President of investment company, said that the development of brand into China may not always be successful. The recovery of agency rights by Hugo Boss group in 2009 is not a good time. In the following years, luxury brands began to show signs of slump.

During this period, Hugo Boss began to open a large number of stores in China, and its performance was good. In fact, the investment in vertical management was huge, and gradually affected the performance. At the same time, the brand aging was serious in recent years.

"As a second tier luxury brand, the purchasing power of Hugo Boss group is enhanced, but some people are attracted by the luxury brands such as LV and PRADA. At the same time, brand design is aging, pricing is high and the attractiveness of young consumers is not enough."

Yang Dayun believes that although the Hugo Boss group is adjusting to the Chinese market, the overall response is still lagging behind, and more caters to Chinese consumers can achieve a breakthrough.