German fashion house Hugo Boss says that improving its online business will be a priority this year as it shores up its recovery in China after slashing prices there.
Since taking over as Hugo Boss chief last May, former finance chief Mark Langer has been cutting costs by renegotiating rents, shutting stores, trimming brands and shifting marketing spending back to menswear. This reverses the course of previous CEO Claus-Dietrich Lahrs, who invested heavily in promoting its womenswear. He quit in February last year after sales slumped in China and the US.
Hugo Boss says it saved more than €100 million (US$106.8 million) in costs and investment last year and will continue to keep a strict control on expenses this year.
Langer has also slashed prices in China to bring them closer to European and US levels, helping sales there rise by almost 20 per cent on a like-for-like basis in the fourth quarter.
Hugo Boss says it expects currency-adjusted sales to be stable this year after a 4 per cent fall to €2.69 billion last year, with online sales down 9 per cent to €76 million, less than 3 per cent of the total.
“Online and retail stores must be more closely linked together,” says Hugo Boss sales chief Bernd Hake.
The company plans to roll out services like “click and collect” to stores across Europe by the end of this year.
E-commerce sales at Hugo Boss were disrupted by a move last year to fulfil orders in Europe itself, instead of via a partner, and the relaunch of its website.
It also plans more digital marketing, forecasting it will spend 70 per cent of its budget online and only 30 per cent on print this year, compared to a 50-50 split two years ago.
Hugo Boss says digital communication has been an important driver of its recovery in China, with a jump in followers on social-media sites WeChat and Weibo last year.