To better control brand experience, German fashion company Hugo Boss has taken back operations in China and Macau.
As China’s luxury market matures, luxury brands in China have focused on the customer’s buying experience, both in-store and online; bespoke or custom options over flashy labels; and consumer education on the finer points of craftsmanship and brand heritage, as well as offering hands-on luxury experiences for customers.
To best provide a cohesive brand strategy, luxury brands have been buying back equity stakes from their local Chinese retail partners.
Hugo Boss is the latest to announce that it has bought the remaining 40 percent stake in its joint venture with Rainbow Group, though no monetary figures were released, according to Reuters.
CEO Claus-Dietrich Lahrs said of the strategy, “The consolidation of our distribution activities in China will further elevate the quality of brand presentation, increase productivity and contribute to the strength of our operational platform.”
The 55 stores controlled by the joint venture generated 94 million euros ($128 million) in 2013 out of total sales of 211 million euros in China from 126 stores and other points-of-sale, which made up around 9 percent of group sales.
Hugo Boss is following in the footsteps of several other luxury brands in China that have focused less on opening more retail stores and more on creating a more luxurious, exclusive brand image in the Chinese market through improving stores and focusing on the customer.
With a strategy based off of the more exclusive, curated luxury shops in Hong Kong, Hugo Boss is taking the same approach as brands including Louis Vuitton, Gucci, Burberry, and Kate Spade.
Kate Spade recently bought out its partner in China and southeast Asia, Globalluxe, for approximately $34 million and set up a headquarter in Hong Kong in order to have “full visibility and control” of the brand experience. This is evidence of the importance of China to the brand as the company expects international sales to outpace domestic US sales.
As Hugo Boss seeks to improve its branding in international markets, the company’s upmarket-move has already been paying dividends with first quarter sales up 16 percent. The Chinese luxury shoppers win too as they will benefit from these consumer-centric strategies.
image source: hugoboss.cn