German fashion house Hugo Boss says it will not be timid with its Chinese expansion strategy.

CEO Claus-Dietrich Lahrs believes that although the market environment in China has deteriorated somewhat due to the more cautious consumer sentiment recently, Hugo Boss is confident that it will be able to hold its own against the tough competition.

In the coming years, some 50 new stores will be opened annually worldwide. A disproportionate 20 or so of these will be in China, including an 8600 sqft bi-level flagship store in Shanghai to open in December.

The strategy is in line with Hugo Boss’ further image improvement as a luxury brand, particularly in China, so as to benefit from the increasing demand for premium and luxury goods among the growing middle class. Hugo Boss also aims to make retail (as opposed to wholesale) account for about 55 per cent of its total sales by 2015 from 45 per cent last year.

“I expect that our catch-up activity in this part of the world will eventually help us to go beyond what we see as a slight slowdown of activity in the retail world,” Lahrs said.

Hugo Boss has been in Hong Kong since 1982 through independent wholesalers and franchisees. It was only in 2006 that it opened its first company-run store in China. Now, it has around 90 stores in China, Hong Kong and Macau.

Hugo Boss reported a total sales of 607 million euros (US$800 million) during the first quarter.

However, competition is getting tougher as rivals such as Italian fashion house Zegna which has current 82 stores in China adds another 10 this year, American fashion brand Michael Kors plans 15 stores in Greater China this year and 100 over the next five years and French luxury brand Hermes launches its flagship in Shanghai next year.

GB