Hugo Boss has issued a profits warning blaming weak economic demand in Europe.
The German fashion house, best known for its minimalist designs and sombre colours, said it expected sales growth of 6-8% and profits growth of 5-7% in 2014, a downgrade on previous estimates that were in the high single digits.
The company blamed “increasing challenges posed by macroeconomic conditions and the recent substantial slowdown in industry growth in Europe” for the lower profits and earnings outlook.
“Over the last few weeks, our business has been increasingly feeling the effects of the weak performance of the sector in Europe and uncertainties in Asia,” said Claus-Dietrich Lahrs, the Hugo Boss chief executive.
Despite clouds on the horizon, the group reported a 9% growth in sales in its first quarter, mostly driven by strong demand in its core markets, such as the US and China. Sales in the Americas were up 11%, in Asia up 13%, compared to an 8% increase in revenues in Europe.
The fashion house is on a drive to open more of its own stores, where it is expecting double-digit growth, and is spending €130m (£101m) on renovations and new outlets. It plans to open around 50 shops by the end of the year, bringing the total to well over 1,000.
