Hugo Boss China says it will close 20 stores to reduce losses.
The decision comes just a fortnight after the company’s CEO Claus-Dietrich Lahrs quit after eight years, taking the blame for a profit warning based on tumbling sales in Greater China and the US.
The German fashion house says it expects its adjusted operating profit to fall in the low double digit percentage rate this year – all due to falling China and US sales.
“To safeguard our profitable long-term growth, we have to align our strategy even more rigorously with customer needs,” explained Mark Langer, finance director with Hugo Boss.
“Management has therefore initiated measures to successfully address the external and company-specific challenges. Our brand’s attractiveness, the quality of our operating platform, our financial strength and our highly motivated workforce give us strong foundations for the future,” he said announcing the decision to close about 20 China stores.
The company says it will also work at improving the company’s “brand perception” in China and the US.
Hugo Boss had already announced plans to reduce prices across Asia to more closely mirror German levels, and limit distribution through wholesale channels to reduce discounting from overstocks.