Bain & Company pointed out in a report on the luxury industry last fall that the fashion game these days is less about where people are buying and more about who's buying. One year later, that's still the case. For big brands, tourism has become a massive sales driver, a sort of global foxtrot that gets charted every quarter in the company's financial report.
For Hugo Boss, Great Britain turned out to be the MVP for the third quarter of the year, which ended Sept. 30 — and within that market, tourists from the United States proved particularly eager to snap up Boss suits and dresses. (So much so that sales from that group wound up doubling.) In Europe, which accounts for about 61 percent of the company's overall sales, travelers from North America and Asia were big growth drivers; sales to Chinese tourists were up 50 percent.
Unfortunately, Europe's sales growth was somewhat diminished by a larger number of Russians staying at home. And as it heads into the final quarter of the year, Hugo Boss's overall momentum has slowed significantly. Last month, the German company warned investors that its sales for the full year were going to come in lower than expected, thanks to increasingly sluggish sales in Asia and the US. Sure enough, the brand's sales dropped two percent in Asia and one percent Stateside — two regions in which the executive team does not expect "any swift upswing."