German fashion house Hugo Boss is struggling to connect with consumers.
Shares of Hugo Boss dropped by more than 7% on Tuesday after the luxury retailer announced it was reducing its 2024 sales forecast due to weakening demand from key markets, including the U.K. and China.
The high-end clothing company updated its outlook, 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 Daniel Grieder, Hugo Boss’ chief executive officer, in a statement.
Although the timing of a “macro recovery remains uncertain,” Grieder stated the company aims to be profitable during the second half of the year. He highlighted the retailer’s “CLAIM 5” growth strategy, which has been in place for the past three years.
Hugo Boss is not alone in facing challenges in reaching consumers in Europe and Asia. Earlier this week, British luxury giant Burberry reported similar issues with Chinese consumers. Burberry also announced it was replacing its CEO and preparing for a drop in profits, causing its stock to fall by roughly 16%.
Chinese shoppers have long been crucial for the luxury industry. Despite Hugo Boss and Burberry’s struggles, other high-end retailers like Prada and Moncler have seen a boost from shoppers in Asia. In April, these retailers reported increased sales driven by local shoppers and tourists.