Hugo Boss finally decide to be in command of their brand in China

No more partnership for luxury brand

All the luxury brands started to open direct operated stores, buy franchises and stakes in retail partner hoping to give more control over store design and how their goods are marketed in Asia, Russia and the Middle East. For example, Gucci, Hermes and Prada in Russia, Burberry in China and Japan and watchmaker Swatch in the Middle East.

What is the next move of Hugo Boss ?

Emerging markets are becoming a goldmine for luxury brands and the German fashion brand Hugo Boss understood it. To improve the way the company is seen in China and in Macao, they decided to take full control of their store network.

The brand recently acquires 40% stake in a joint venture with franchise partner Rainbow Group in China and in Macao. The price haven’t been announced. However, this operation consist of 55 stores which generated about 94 million euros last year. The total sales in China of Hugo Boss is reaching 211 million euros from 126 stores. It represents 9% of the group sales.

The Chief Executive of the brand, Claus-Dietrich Lahrs said « The consolidation of our distribution activities in China will further elevate the quality of brand presentation, increase productivity and contribute to the strength of our operational platform »

The startegy of Hugo Boss right now is to run more of its own stores around the world and specially in emerging countries to be able to control more easily their image. Stop selling through partner already brought to the brand a 16% increase in their retail sales in the first quarter of the year.

Source : Reuters

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