Hugo Boss will expand its presence in China, key shareholder Gaetano Marzotto said in an interview to German newspaper Welt am Sonntag. Despite slowing growth in the world’s second-largest economy, Marzotto told the paper that he saw the potential for higher sales in China.
“Up until now China accounts for less than 10% of group sales, this could be ramped up,” Marzotto said . The Marzotto family holds a 7.95% stake in Hugo Boss, making it the company’s biggest shareholder.
The Chinese are the world’s biggest buyers of luxury goods and have been increasingly shopping abroad as big shifts in exchange rates make luxury items much cheaper for them in Europe than at home.
Hugo Boss’s currency adjusted sales in the country increased 1% in the six months through June versus a decline of 2% in the prior year period. Finance chief Mark Langer said earlier this month he did not expect an improvement soon in China, which contributes about 8% of group sales. Hugo Boss recently took over 21 stores in China, previously operated by a partner, to strengthen its brand in the market.
The group has been spending heavily on expanding its own store network, where sales are more profitable than through other retailers’ shops.