Hugo Boss seeks to grow in China despite weak demand, CFO says

German fashion house Hugo Boss said on Tuesday it sought to expand its limited exposure to China and build brand visibility over the long run, despite a dent to its third-quarter sales from weak demand in the region.

Hugo Boss delayed its 2025 revenue and profit targets earlier in the day, after its third-quarter revenue growth was dampened by sales declines in the Asia-Pacific region on sluggish Chinese consumer demand.

Luxury groups have struggled with tighter consumer spending in recent quarters, especially in China, where a property slump and job insecurity have exacerbated the problem.
Still, the company said it was continuing its efforts to grow in the region, which represents 5% of its overall sales.

This was in contrast with some companies’ strategy to cut prices and costs and scale back activity in the world’s second-biggest economy which was lagging in recovery efforts.

Chief Financial Officer Yves Mueller said on an investor call the company was focusing on bigger stores to deliver a better customer experience, which was in demand among Chinese shoppers.

The company was expanding its Boss Green line offering which includes technical and outerwear items, Mueller said, as Chinese customers were “very sports oriented.”
It was also investing in amplifying its presence on social media platform TikTok.

However, Hugo Boss would remain vigilant given the uncertain near-term outlook for consumer sentiment in the region, he said.