Retail Contraction Has Delayed The Development Of Electricity Providers. HUGO BOSS Is Facing A Crisis In China.

< p > recently, it was reported that < a href= "http://www.91se91.com/news/index_c.asp" > Hugo Boss < /a > group CEO Claus-Dietrich Lahrs at the investor conference in Hongkong said: "the Chinese market will not be able to resume double-digit growth in the next few years, and the Chinese market will be difficult.

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< p > in the field of luxury which has always been dominated by France and Italy, HUGO BOSS, a German lineage, occupies a pivotal position in men's wear with its rigorous and steady suit.

At the end of this year, HUGO BOSS's sharp decline in the Chinese market contrasted sharply with the optimism that it had placed on the Chinese market.

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< p > this pessimistic argument is not groundless, but a practical inference derived from a series of struggles in HUGO BOSS.

The reasons behind this are the impact of the big environment and the lack of HUGO BOSS's own strategy.

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The net sales in the three quarter of < p > < strong > only increased by 2% < /strong > /p >

< p > < strong > original target is difficult to achieve < /strong > < /p >.

The announcement of the three quarter results of < p > HUGO BOSS has completely reversed the ambitious expansion plan of HUGO BOSS before returning to the cruel reality.

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< p > according to the results of the three quarter of HUGO BOSS2013, as of October 30, 2013, the Hugo Boss AG (BOSSn.DE) Hugo Bosch Group's net sales in the three quarter increased 2% from last year to 657 million 900 thousand euros, less than 677 million euros of the market forecast, but the 18% increase in retail business (total 320 million 500 thousand euro) and 4% same store sales growth supported the group net sales growth of 5% under constant exchange rate.

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The net profit of < p > three was 112 million 500 thousand euros, which was 9% higher than that of the same period last year. The profit before EBITDA interest tax depreciation and amortization increased 5% to 173 million euros compared with the same period last year, which is in line with market expectations. The gross profit margin is 63.5%, a 340 basis point higher than that of 60.1% in the same period last year.

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"P >, from all regions, Europe is still the strongest growth area of Hugo Boss AG (BOSSn.DE) Hugo boss group. The three quarter sales grew by 8% over the same period, and the United States remained stable compared with the same period last year.

Asia has increased by only 4%, of which China accounts for about 2/3.

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< p > but the speed of HUGO BOSS expansion is not decreasing, and the focus of expansion is on Direct stores.

By the end of the three quarter, the Hugo Boss AG (BOSSn.DE) Hugo boss group had a total of 992 retail stores worldwide, compared to 840 in the same period last year, with a net increase of 152.

Moreover, retail sales accounted for 51% of group sales, up six percentage points over the same period last year, exceeding wholesale business.

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< p > Group CEO a href= "http://www.91se91.com/pioneer/" > Claus-Dietrich Lahrs < /a > said in the earnings report: "compared with the first half of this year, the demand for our stores increased significantly in the three quarter, because we predict that the four quarter will achieve strong growth in both sales and earnings."

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< p > however, shortly after, Hugo Boss group made it clear that the original target could not be achieved on schedule.

Hugo Boss group originally planned to raise its profit margin (EBITDA) to 25% of sales in 2015.

However, the Group expects annual sales to reach 3 billion euros in 2015.

Expected sales and profits in 2013 will grow by 6% to 8% over the same period.

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< p > industry analysts are more pessimistic. They believe that Hugo Boss can only sell 2 billion 900 million euros by 2015, and EBITDA profit margin is 23.7% of sales (22.6% in 2012).

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Compared with other a href= "http://www.91se91.com/news/index_c.asp" > luxury brand < /a >, HUGO BOSS has two distinct points: first, China has a small market share; the two is to focus on wholesale business.

In the layout of other luxury brands, the market share of the Chinese market is mostly occupied by the first two, accounting for nearly half of the total sales. Therefore, China has become the preferred gold nuggets.

But HUGO BOSS is quite different. China's market share is far lower than that of the European and American markets, and its performance has not been ideal.

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In August this year, after HUGO BOSS released its semi annual report, its chief financial officer, Mark Langer, accepted the German media Boersen-Zeitung interview. He expressed the hope that the contribution of the Asia Pacific business to the total revenue of the group could increase from 15% to 21% before 2015, P --EndFragment--.

At present, the United States and Europe are the two largest markets of HUGO BOSS.

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< p > but it is undeniable that HUGO BOSS's latest two CEO all value the development of the Chinese market.

Especially the incumbent CEO Claus Dietrich Lars (Claus-Dietrich Lahrs), has worked in LVMH group for 12 years and served as Dior women's wear CEO.

Since taking office in 2008, his philosophy has injected new blood into HUGO BOSS.

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The most notable change of < p > is to adjust the business structure of HUGO BOSS, and gradually pform the original wholesale business into direct business.

Ras firmly believed: "no matter when you choose to leave Europe, future business will depend on retail sales, and in most cases, it depends on the retail business that the company controls."

As a result, RAS carried out a drastic adjustment of the business structure.

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< p > according to foreign media reports, the distribution ratio of direct retail outlets and wholesale channels of HUGO BOSS was 22% and 75% in 2005, but little changed since then. However, the ratio has changed to 40% and 57% since the time when laus took office and did not reach two years in 2010.

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< p > it is worth mentioning that in 2012, the retail sales of HUGO BOSS exceeded the wholesale channel for the first time.

Of course, this will benefit from the full laying of the direct sales network.

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< p > < strong > electricity supplier's strength is later than /strong > /p >

< p > in order to achieve the original goal, Hugo Boss has also increased its marketing input and promoted the advertising expenditure to 6 to 7% of sales volume (five to 4.7% in the past five years).

In China, publicity has also been stepped up, and the latest show is directly moved to China.

Following the 2012 Hugo Boss Beijing show, the May Hugo Boss 2013 autumn and winter fashion show will come to China again, and a fashion show will be held in Shanghai.

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In addition to P, in February this year, Hugo Boss launched a 24 hour direct e-business platform in the Chinese market, selling a full range of products of the core brand BOSS, including men's wear, women's wear, shoes, accessories and perfume series.

Prior to this, Hugo Boss's e-commerce business is now only in Europe, and plans to begin development in the US and China in 2013 and enter Russia in 2014.

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Compared with Armani BOSS, the most direct and advantageous competitor of HUGO BOSS, HUGO BOSS is obviously lagging behind its competitors in the electricity market of the Chinese market.

As early as 2010, Armani group launched its e-commerce website for its Emporio Armani brand. This is also the first e-commerce website launched by large luxury group in China.

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< p > the wealth quality list released by the Institute of wealth quality in 2013 shows that Armani is the most popular menswear brand in China's rich.

Although the Chinese market accounts for 10% of Armani's global sales, it even increased by 39% in 2012.

Prior to that, John Hooks, vice president of the group, thought it was easy to raise this proportion to 20%.

By contrast, latecomers HUGO BOSS are optimistic.

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< p > in the first half of the year, the famous European men's clothing brand of Hongkong textile giant Li Feng Group, which has Kent&Curwen, Gieves&Hawkes and Cerruti, declined in performance, and there were 17 stores in the Chinese market in half a year.

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< p > in addition, from the layout of the product line, HUGO BOSS has been focusing on men's wear, women's wear and the development of lucrative accessories products line has not been satisfactory.

In June of this year, HUGO BOSS hired American Chinese designer Jason Wu (Wu Jigang) as artistic director of women's clothing to enhance the influence of women's clothing.

But the design of Jason Wu will begin to enter the market from the 2014 early autumn Boss series. Whether it can help HUGO BOSS get out of the crisis still needs the test of the market.

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