Hugo Boss, the renowned German fashion house, has announced its return to growth in China in June, despite facing a loss in the second quarter. The company experienced a significant decline in sales, down by 59%, during this period primarily due to the implementation of lockdown measures and temporary store closures. However, there was a silver lining as Hugo Boss observed a noteworthy increase in online sales, which surged by 74% in the quarter.

Within mainland China, Hugo Boss managed to achieve a 4% rise in sales, with a particularly impressive double-digit growth in June. The online business in the country more than doubled during the quarter, indicating a strong consumer demand for the brand. This aligns with the broader trend witnessed in the luxury goods sector, as the world’s biggest luxury goods group reported an upturn in sales momentum and an improvement in China.

Hugo Boss reported quarterly revenue of €275 million (£247.52 million), which was largely in line with the average analyst forecasts of €288 million. The company also reported an operating loss of €124 million, closely aligning with the expected loss of €133 million. Sales in Europe witnessed a sharp decline of 59%, while the Americas suffered an 82% drop, primarily due to the temporary closure of stores and a significant decrease in tourism.

Furthermore, the civil unrest and demonstrations that occurred in the United States during May and June also added strain to Hugo Boss’s business during those months. However, the company remains cautiously optimistic about the second half of 2020 and anticipates a gradual improvement. Nevertheless, due to market uncertainty, Hugo Boss has declined to provide a full-year forecast.

This news arrives at a time when fashion retailers worldwide are facing the challenges posed by the COVID-19 pandemic. As countries ease restrictions and consumers adapt to new ways of shopping, brands like Hugo Boss are leveraging online platforms to capture demand and sustain growth. The strong performance in China and the significant surge in online sales indicate promising signs for the luxury fashion market. Hugo Boss’s ability to adapt and capitalize on these shifts will be crucial to its future success.

Useful Links:
1. Business of Fashion: Hugo Boss Reports Return to Growth in China
2. Reuters: Hugo Boss Sees Recovery Beginning in China in Q2