German fashion house Hugo Boss is struggling to connect with its consumers.
Shares of Hugo Boss dropped more than 7% on Tuesday after the luxury retailer announced it was reducing its 2024 sales forecast due to weakening demand in key markets, including the U.K. and China.
The high-end clothing company revised its outlook in light of “persistent macroeconomic and geopolitical challenges” that have dampened global consumer demand.
“We are operating in a period of significant global macro uncertainty, which also affected our performance in the second quarter,” said CEO Daniel Grieder in a statement.
Though the timing of a “macro recovery remains uncertain,” Grieder stated that the company aims to be profitable in the second half of the year through its “CLAIM 5” growth strategy, which has been in place for three years.
Hugo Boss is not alone in its difficulties. Earlier this week, British luxury brand Burberry reported similar challenges, particularly falling demand from Chinese consumers. Burberry also announced the departure of its CEO and warned of a profit decline, resulting in a roughly 16% drop in its stock price.
Despite these struggles, some high-end retailers like Prada and Moncler are experiencing positive trends in Asia. In April, these companies reported that their sales were bolstered by local shoppers and tourists.