Luxury Brand Hugo Boss Will Close 20 Stores In China

Hugo Boss is a world famous luxury brand, originated from Germany, mainly in men and women's clothing, perfume, watches and other accessories.

The first BOSS perfume was launched in 1993.

Hugo Boss

After experiencing difficulties and challenges in 2015, it decided to slow down the expansion of its retail network appropriately.

The brand said Thursday that the group decided to close 20 stores in China, while retail related investments would also be reduced to below 200 million euros.

Mark Langer, chief financial officer of Hugo Boss, said that improving sales performance is more important than expanding retail networks. In 2016, there were no more than 20 new shops, and 72 new outlets in 2015. At present, there are 1113 Hugo Boss entities.

The group said it would never give up its efforts to develop wholesalers from retailers to retailers in the past ten years. The group is actively increasing the consumption experience in the physical shops, and plans to redecorate 100 stores this year to enhance the consumption experience.

Hugo Boss retail business has been growing for six consecutive years, the Group expects.

There will be further growth, but the lower profitability is still a challenge for the group.

For Hugo Boss, 2015 was a turbulent year. Over the past six months, weak sales in China and excessive sales in the US led to a two fold decrease in group profit.

In February this year, a group spokesman said that the weak sales in the two regions of China and the United States since the beginning of this year will lead to a double-digit decline in the operating profit of the group in 2016. The group said it would abandon the target of operating profit rose to 25% in 2020.

In addition, the group CEO Claus-Dietrich Lahrs abruptly announced its resignation in February this year, this high-level personnel turbulence incident undoubtedly made Hugo Boss worse.

Thursday,

The spokesman said that after excluding the exchange rate effect, it was mainly due to the development of retail business. It is expected that there will be a single digit sales growth in 2016, and wholesale business is expected to decline in a single digit.

At the earnings conference, the group revealed its business strategy aimed at improving the market position of Hugo Boss in the US and China.

The group decided to restrict wholesale business to reduce discounts and promotions, and to reach an agreement with Messi general store to manage Hugo Boss brand stores in department stores.

Mark Langer acknowledges that the wholesale business in the US region has slipped. Wholesale business now accounts for 41% of the total revenue in the US region. However, the wholesale business is expected to be conducive to the steady growth of future retail sales.

Hugo Boss has adjusted that prices in China and other Asian regions are close to European level, and commodity prices have dropped by nearly 20%, and demand in these areas is also rising. Although the number of stores in China will decrease, the group will expand its stock network.

Mark Langer said that as of April, all stores in Hugo Boss in China will be managed by the group. The former franchised stores will be recovered, and the group plans to redecorate or relocate 10 shops in China.