Hugo Boss Issued A Profit Warning: Men'S Purchasing Power Is Inferior To Women'S

The purchasing power of men is not as good as that of women, which is still true in the high-end luxury industry.

Hugo Boss, Germany AG (BOSSn. DE) Hugo Bosch Group recently issued a profit warning that the Chinese and American markets, which began to turn negative in the third quarter of last year, are still deteriorating, so it is expected that the fiscal year 2016 Core earnings There will be a decline of more than 10%.

　　Hugo Boss has not yet announced the profitability of fiscal year 2015. However, the fourth quarter financial report released in the middle of January this year showed that the situation in China and the United States in the quarter was still severe, maintaining double-digit sales declines, resulting in sales declines of 7% and 1% respectively in Asia and the Americas (in terms of RMB and US dollars), but benefited from the strong performance of Europe, especially the United Kingdom and Southern Europe, The Group's overall revenue grew at a fixed exchange rate of 5%. However, the operating profit increased by only 0.5%, far worse than the Group's established target of 3% - 5%.

In its profit warning released this week, the company said that so far in 2016, the group's retail business in China and the United States was worse than expected.

There is no separate data to show the sales of this company in China, but the reporter learned from relevant institutions that, Hugo Boss closed 11 stores in 2015, which is the largest number of luxury brands in China.

"China has become a 'disaster area' for many luxury brands, and these brands are falling into the quagmire of slow growth and even regression." A luxury industry practitioner pointed out, "Of course, this may be due to their rapid growth in China."

In order to cope with the downturn, Hugo Boss The group gives several adjustment aspects. According to the channel, the company currently has three major parts: retail, wholesale and online. It is reported that the company will continue to restrict the distribution of BOSS core brands in the U.S. wholesale channels to avoid the negative impact of the local high discount market environment. In terms of pricing, the Asian market will be lowered to a level closer to Europe and the Americas.

Hugo Boss is not alone in price adjustment strategy. In fact, in order to overcome the impact of the economic downturn and re stimulate consumers' purchase enthusiasm, many luxury brands began to seek changes.

"The growing luxury industry is also forced to solve the global problem Price difference Problems. ”Bruno Lano said. According to Bain's research, if the price difference is less than 20%, half of consumers can accept it, but if it exceeds 30%, people tend to look for other ways to buy.

As a result, the adjustment of global price difference has become a key measure to deal with agency purchase and overseas purchase. Although previously, in order to maintain the brand image, luxury goods often do not want to appear the word "discount" in stores. But in 2015, Chanel took the lead in implementing this strategy. This old luxury goods company announced a 20% price reduction for several classic products. After that, GUCCI followed suit and began to promote in stores across the country. More than two-thirds of its products fell by more than 50%.

Such marketing behavior is too "intense" in the eyes of some "conservative" luxury industry insiders. However, the price reduction of these two brands has brought about significant results: there is a long queue at the door of the store, and customers rush to buy their favorite products in the store. This is a rare bustling scene in luxury stores, where goods on the shelves are sold out.

Since then, Prada's performance in the third quarter of 2015 (up to October 31, 2015) has still declined. After that, Prada released a strategy to save its performance. In addition to reviewing its development and further reducing costs, it will also implement global coordinated pricing and increase the price in Europe. The company sincerely gave a specific goal, that is, to narrow the current 35% price difference between Europe and China to 10% - 15%, so as to keep Chinese customers in local consumption.

In addition, in order to stimulate sales growth again, various brands in the industry are also making adjustments in brand repositioning, store setting, e-commerce and digitalization. Faced with the rapidly changing luxury market, brands have never been so proactive in pleasing consumers.

Luxury expects that the macro environment will not fluctuate significantly in the future, and the rising middle class will become more mature and understand luxury goods better. Undoubtedly, leading brands have become the major trend in this industry to guide the global price difference adjustment.

In the 2015 China Luxury Market Research Report released by Bain, the scale of the luxury market in mainland China in 2015 was 113 billion yuan, down 2% year on year. This is the second consecutive year of overall decline in China's luxury market.

The reporter noticed that in this report, products such as women's clothing, jewelry, cosmetics and perfume showed an increase of 10%, 7% and 5%, but men's clothing and watches were the hardest hit areas of decline, down 12% and 10% respectively. Bruno Lanno, the author of the report and the global partner of Bain Company, explained that "this is because the follow-up impact of the anti-corruption trend has not ended, as well as the huge impact of the slowdown of economic growth and the stock market crash in the second and third quarters."

This also proves that women are loyal supporters of luxury goods, while male consumers are more likely to abandon them.