Hugo Boss allowed the sale of stores in Russia

The Hugo Boss concern announced the suspension of retail sales and online operations in RUSSIA last year, but did not leave the Russian market. According to the newspaper, he decided to sell the assets and focus on wholesale sales.

The German concern Hugo Boss is considering selling its assets and liabilities in Russia and focusing on wholesale deliveries to the country. This is stated in its reporting for the first half of the year.

Hugo Boss is "reviewing its business structure in Russia and is looking for a solution that fits the group's business model," its press service in Russia told Kommersant.

Hugo Boss is one of the largest clothing manufacturers in Germany. At the end of last year, Hugo Boss Rus managed 19 stores in Moscow, the Moscow region , St. Petersburg and Rostov-on-Don. According to SPARK, the revenue of Hugo Boss Rus for 2022 decreased by 17% year-on-year, to 6.3 billion rubles, the loss amounted to 26.2 million rubles. against net profit of 406 million rubles. a year earlier.

After the decision to independently develop business in Russia, Hugo Boss did not abandon the partnership with the distributor. According to the Trade Management presentation for the first quarter of this year, the company manages three Hugo stores, the newspaper writes. The Hugo and Boss brands together account for 17% of the distributor's sales structure.

CORE.XP Senior DIRECTOR Marina Malakhatko noted that Hugo Boss is able to continue wholesale deliveries, but the concern had to stop investing in development in the Russian market. Anna Mankova, Senior Director for Agency Services of the Commercial Real Estate Department of the Commonwealth Partnership, added that the opportunity to continue cooperation through wholesalers is being used quite successfully: the brand is in demand in the premium fashion segment and has demonstrated a good level of sales.

Last March, Hugo Boss announced the suspension of retail sales and online operations in Russia. According to Malakhatko, when deciding to leave only wholesale deliveries, it is difficult for the manufacturing company to control the uniformity of prices, quality of service and sales, so the brand will partially lose its position in the premium segment market.

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According to CMWP (Commonwealth Partnership, until last April Cushman & Wakefield), at the beginning of the year, 85 Western brands announced a change in the status of their Russian business, the newspaper writes. Of these, 70% made the final decision to leave the Russian market or stay until the middle of the year. 30% of Western brands have not yet decided on a decision, mainly premium brands.

For example, the American clothing and footwear manufacturer VF Corporation (Vans, The North Face brands) has previously focused on the wholesale direction. VF Corporation has been developing a retail network of stores under the Vans brand in Russia since 2020, having bought the stores operating under this brand from its franchisee A3 Retail Group. According to the company, at the end of last year there were 12 Vans stores in Moscow and St. Petersburg, but in the spring the last Vans outlets in Russia were closed.

In April, VF CIS received the first Declaration of Conformity this year for women's and men's clothing under The North Face, Vans, Napapijri, Dickies, Disney and Timberland brands. The supplier is the Swiss VF International SAGL, and the production sites are enterprises in Japan, CHINA, Bangladesh, Malaysia, Vietnam, EU countries . These brands are not subject to EU sanctions , which prohibit the supply of clothing in Russia for more than €300 per item.

Of the largest clothing manufacturers, Adidas, Nike, Reebok, as well as the Inditex group, Swedish H&M and a number of other companies have previously announced their departure from Russia. Then part of the stores began to gradually return to the market under other names and with new foreign owners.