German fashion house Hugo Boss has announced to close around 20 stores in the China market amid “the difficult market situation”.
The company said earnings fell slightly short of expectations and currency-adjusted sales declined due to the falling of sales in China and the US.
In the Americas, fourth-quarter sales dipped 1% below the prior year’s level in local currencies, while double-digit sales decreases in China led to a currency-adjusted decline of 7% in Asia/Pacific in the fourth quarter.
“To safeguard our profitable long-term growth, we have to align our strategy even more rigorously with customer needs,” said Mark Langer, CFO of Hugo Boss AG, in the statement.
“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.”
The company has brought price structures in China and some other Asian markets closer to the European level to boost sales.
It will also take actions to improve market position in the US and China and to optimise own retail business.
The decision comes after the company’s CEO Claus-Dietrich Lahrs quit after eight years last month, taking the blame for a profit warning based on weak sales in Greater China and the US.
Hugo Boss currently has 145 stores in Greater China.