METZINGEN (dpa-AFX) - Hugo Boss is divesting its Russian business. The fashion group confirmed media reports that its Russian subsidiary has been sold to its long-standing wholesale partner Stockmann JSC. "Stockmann is a company owned by one of Hugo Boss' long-standing wholesale partners in Russia. As a result, Hugo Boss will no longer be represented by its own subsidiary in Russia," said a company spokesperson. The Russian authorities have already given their approval.

Shortly after the start of the Russian war of aggression in Ukraine, Hugo Boss announced in March 2022 that it had closed its stores in Russia and also suspended its online business. Together with Ukraine, the Russian business accounted for around three percent of Group sales in 2021, according to the label.

Cost-cutting program

Things are not going well at Hugo Boss. Following a slump in profits in the second quarter, the fashion group announced its intention to cut costs. The current market environment is being taken into account and cost discipline will be tightened, announced CEO Daniel Grieder when presenting the final figures. In addition to potential savings in procurement, the company also wants to reduce costs in areas such as sales, marketing and administration. In addition, the cost structure in retail is to be adjusted "in line with current visitor trends".

The measures are intended to support the development of earnings in the second half of the year. A weaker consumer climate and higher marketing and stationary retail costs led to falling revenues and a slump in profits in the second quarter. On balance, Hugo Boss earned 37 million euros, around half of the previous year's figure. The company had already presented preliminary figures in mid-July and cut its forecast for the year as a whole. Hugo Boss set a sales record last year.

New growth strategy

Three years ago, the Metzingen-based company presented a new growth strategy "Claim 5" with the aim of doubling sales to 4 billion euros by 2025. "Our vision is to become the world's leading technology-driven fashion platform. We will significantly change the way we interact with consumers," Grieder announced. "Our goal is to double our turnover to 4 billion euros by 2025 and become one of the world's top 100 brands." The company now expects sales to increase by only one to four percent to between 4.20 and 4.35 billion euros in 2024. Previously, Hugo Boss had expected an increase in turnover of three to six percent./tat/DP/jha