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German fashion house Hugo Boss is having a hard time connecting with consumers.
Shares of Hugo Boss fell by more than 7% on Tuesday after the luxury retailer said it was slashing its 2024 sales outlook due to weakening demand from key markets, including the U.K. and China.
The high-end clothing company said it updated its outlook after factoring in “persistent macroeconomic and geopolitical challenges” that have placed a damper on global consumer demand.
“We are operating in a period of significant global macro uncertainty, which also affected our performance in the second quarter,” said Daniel Grieder, Hugo Boss’ chief executive officer, in a statement.
Grieder said that although the timing of a “macro recovery remains uncertain,” the company is aiming to be profitable during the second half of the year. He boasted that the retailer plans to do this via its “CLAIM 5" growth strategy, which has been in place for the previous three years.
Handbag maker Hugo Boss is not alone in its struggles to reach consumers in Europe and Asia. Earlier this week, British luxury giant Burberry echoed similar woes, saying it was falling out of favor with Chinese consumers. Furthermore, Burberry said that it was getting rid of its CEO and bracing for a tumble in profits, which prompted the fashion brand’s stock to fall by roughly 16%.
Chinese shoppers have long been a lynchpin for the luxury industry. And despite Hugo Boss and Burberry’s struggles, other high-end retailers, such as Prada and Moncler, have actually been getting a boost from shoppers in Asia. Back in April, the retailers said their sales were aided by local shoppers and tourists.