German fashion house Hugo Boss is struggling to connect with consumers. Shares of Hugo Boss dropped over 7% on Tuesday after the luxury retailer announced it was cutting its 2024 sales forecast due to weakening demand from key markets like the U.K. and China.
The high-end clothing company adjusted its outlook after considering “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 Hugo Boss CEO Daniel Grieder. Despite the uncertain timing of a “macro recovery,” Grieder stated that the company aims to be profitable during the second half of the year through its “CLAIM 5″ growth strategy, which has been in place for the past three years.
Hugo Boss is not alone in its struggle to reach consumers in Europe and Asia. British luxury giant Burberry recently reported similar challenges, losing favor with Chinese consumers. Burberry also announced the departure of its CEO and warned of a decline in profits, leading to a roughly 16% drop in its stock.
Chinese shoppers have long been crucial to the luxury industry. Despite the difficulties faced by Hugo Boss and Burberry, other high-end retailers such as Prada and Moncler are experiencing growth. These brands reported in April that their sales were bolstered by local shoppers and tourists in Asia.