Market Downturn Hugo Boss Will Abandon Luxury Goods

Today, the huge changes in the consumer market, the performance of the luxury goods industry is not optimistic, and even can be said to be relatively low. A few days ago, Hugo Boss's new chief executive, Mark Langer, first revealed in a media interview that the company plans to abandon the luxury market and focus on the return of sales quality. Men's Wear 。

And other luxury fashion Like brands, Hugo Boss also felt heavy pressure on the luxury goods industry. This year, the company has seen the most serious recession in the past 7 years, and its sales performance in the US and China has dropped sharply. Driven by inadequate sales momentum, operating profit fell 4% to 622 million euros in the second quarter, which again worried the industry's future prospects.

Mark Langer explained that the early group's entry into the luxury market did not help the company's performance. He stressed that the more focused development of men's fashion products is the key to maintaining Hugo Boss's reputation for quality brands. Some analysts speculate that the new CEO Mark Langer has pointed out the new direction of the company's development, which means that Jason Wu, the creative director of branded women's clothing, will probably leave.

In May this year, the company's former chief financial officer, Mark Langer, was officially appointed as the new chief executive of the company. Based on his understanding of the brand's financial operation status, he issued a statement that he would streamline the group structure by reducing the rental expenses of the stores, closing the bad stores and focusing on developing the core business men's clothing.

Claus Dietrich Lahrs, the former chief executive of Hugo Boss, has insisted on expanding the market of luxury goods even during the global financial crisis. It has opened more than 400 stores worldwide and has invested a lot of money in the women's wear series, trying to reiterate its own high-end brand positioning through global expansion. Designer Jason Wu accepted the invitation of Claus Dietrich Lahrs to join Hugo Boss as the creative director of women's clothing. Women's wear Series of sales growth has been more than men's wear series, but women's clothing series is not brand flagship, sales revenue share is still very low.

Claus Dietrich Lahrs announced its resignation in February this year, ending its 8 year term in Hugo Boss. After the departure of Claus Dietrich Lahrs, Hugo Boss announced that it would close 20 stores in China and reassess the global retail network in response to the downturn in the luxury sector.

The second quarter report released by Hugo Boss in August showed that the company's performance was weak, and its one-time net outlay of 57 million euros was closed by the closed stores. The net profit of the group fell by 84% compared to the same period last year. The group decided to stick to its streamlined strategy and close down 20 inefficient outlets worldwide to control operating costs. Through these measures, the annual cost is estimated to be reduced by 50 million euros. In order to better consolidate the existing customer base, Hugo Boss's main brand Boss began to depreciate in February this year, and expanded its price range of entry-level products around 500 euros.

John Guy, an analyst at MainFirst, said that if Hugo Boss continues to be highly correlated with consumers, it is necessary to streamline the brand and store structure. Other analysts believe that if Hugo Boss is successfully restructured, the group will be turning into a profit turning point at the latest in 2018. The Hugo Boss group will announce its third quarter earnings report next week and is expected to announce its latest strategy on November 16th in London investor day.