Luxury retailer Hugo Boss expects sales and operating profit to recover in the fourth quarter, reports Reuters. This is expected to be realised with more modern stores and growth in mainland China and e-commerce. Earlier, the German fashion house reported falling sales in the United States and Hong Kong.
In October, Hugo Boss cut its 2019 earnings forecast. It reported preliminary third-quarter results that were below its expectations which were confirmed last Tuesday. According to Chief Executive Mark Langer, a “significant” increase in operating profit in the fourth quarter is expected thanks to the citing expansion in mainland China and its booming online business. The online business grew by 36% in the Q3.
The luxury fashion house also expects to benefit from investments in sprucing up its stores, like its flagship on the Champs Elysee in Paris, as well as positive reception to recent fashion shows in Milan and Shanghai.
The Asian market
In total, sales in Q3 fell 8% in the Americas on a currency-adjusted basis. Hugo Boss blamed this on a fall in demand in the United States from locals and tourists, as well as a decline in the wholesale channel. Contrary, online sales grew. In Asia, sales growth slowed to 2% due to a significant sales decline in Hong Kong, partially offset by continued strong momentum in mainland China.