Hugo Boss Mulling China Joint Venture, Aggressive Expansion

China One Of Premium German Brand's Top International Markets While joint ventures are common among international and Chinese automakers, we haven't seen many taking place in the fashion world. (Aside from recent moves by companies like Hermes, whose home-grown Chinese spinoff brand Shang Xia will land in stores this September.) That could soon change, however, as sources report this week the premium German fashion house Hugo Boss is in talks with Chinese fashion retailer Rainbow Group about setting up a joint venture to tap rising Chinese consumer spending power and retail consumption. From Reuters: "Boss is already working with Rainbow as a franchise partner in China and they now want to turn this relationship into a joint venture to be able to cope with rising growth rates in future," said one of the sources, who is close to Hugo Boss. Another source also said that Hugo Boss was in talks with Rainbow Group. Hugo Boss has identified China as one of its key growth markets and is heavily investing in the region to be less dependent on the European market. Hugo Boss said that a decision has not yet been taken and declined further comment. According to the article, the Asia-Pacific region currently accounts for around 10% of total revenue for Hugo Boss, and the company plans to expand aggressively to reach a goal of taking in 21% of revenue from Asia-Pacific sales within the next five years. As part of the company's growth plan, it expects to open somewhere in the range of 20 stores per year in China, and that is where a Chinese joint venture -- and the access to strong distribution and sales networks it would bring -- plays a major determining factor.

Hugo Boss Mulling China Joint Venture, Aggressive Expansion

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Published May 13, 2010

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Hugo Boss Mulling China Joint Venture, Aggressive Expansion