Hugo Boss' chief executive Daniel Grieder has added to the prevailing gloom in the luxury and premium fashion segments by issuing a few words of caution in the German label’s interim trading update.
After a period of top-line growth at the turn of the decade, “the global market environment deteriorated substantially in the first half of 2024”, warned Grieder.
“The weakening consumer sentiment in most markets led to a rapid slowdown in growth across the entire industry, which we could not completely escape from,” he continued.
“And while the macro environment is likely to remain difficult for the time being, we are steadfast in our commitment to continue driving above-trend growth, capturing further market share, and focusing even more on operational and organisational productivity.”
His comments echo similar sentiments made in other leading European fashion houses including LVMH, Gucci owner Kering and British label Burberry Group PLC (LSE:BRBY).
Sluggish sales in the important Chinese market have been particularly damaging for the luxury sector, something reiterated by Hugo Boss today.
Currency-adjusted sales in the APAC region decreased 4% in the first half, with Hugo Boss stating: “This development mainly reflects sales declines in China, as muted consumer confidence weighed on domestic retail consumption.”
European sales were also down (by 2%), with Germany, France and the UK posting underwhelming results.
On the back of these first-half results, which saw sales tick just 2% higher, Hugo Boss has reduced its full-year sales guidance growth from between 3% and 6% to between 1% and 4%.
Perhaps appreciating this clarity on the outlook, no matter how underwhelming, the market pushed Hugo Boss shares 2.75% higher to €37.76 on Thursday.
However, shares in the group remain more than 42% lower year to date.