Back in October, Hugo Boss warned investors that its revenue for 2015 would be coming in lower than previously expected due to weakening sales in the U.S. and China. With the release of the brand's annual financial results on Thursday, that promise held true: Hugo Boss saw its sales rise just 3 percent to €2.8 billion during 2015, the lower end of the 3 to 5 percent growth it had predicted this fall.
Jason Wu's womenswear collection outpaced the rest of the company's growth, with sales growth in the double digits — though it only contributed 11 percent of total sales, as it did in 2014. But while Europe, the German label's biggest market, saw its sales rise 5 percent, they sunk by 2 percent in China. Executives wrote that they don't expect the premium and luxury fashion market to get much easier in China in 2016.
One thing that Hugo Boss can control, however, is its store fleet, and on that topic executives had quite a lot to say on Thursday. It's not hard to see why: The brand's own retail locations accounted for 60 percent of overall sales in 2015, and wholesale represented another 38 percent. Hugo Boss's own e-commerce is relatively minuscule, partly because it's limited to just 11 countries. (Primarily European, plus the U.S. and China.)
One big push for Hugo Boss has been limiting the distribution of its product in shop-in-shops, and making agreements with department stores to have the Boss team manage those locations "in order to improve the quality of presentation" — basically, to make sure the retailer in question isn't making its brand look like crap. (Boss did this with Macy's at the beginning of the year, for instance.) On top of that, the company is slowing down its store growth, with only 20 freestanding store openings planned for 2016. In 2015, it opened a net of 42 freestanding retail locations.