Hugo Boss to raise prices in Europe as part of profits plan

Hugo Boss (LSE: 0Q8F.L - news) is to raise some prices in Europe but cut them in Asia as it aims to turn around its fortunes.

The luxury fashion brand announced a series of measures to investors at an event in London, including a focus on wholesale and digital sales at the expense of more physical stores.

It said the price shifts in Europe and Asia would bring the cost of its goods more in to line, and that it would also cut its fashion range to two brands - Hugo and Boss.

Chief (Taiwan OTC: 3345.TWO - news) executive Mark Langer said Boss would focus on upper premium business wear, while Hugo would target younger customers, offering casual wear with a 30% lower entry-level price tag.

He argued the new strategy would return the company to growth by 2018 with underlying profits for the current year forecast to fall by up to 23%.

"By further developing our strategy we want to steer Hugo Boss back toward sustainable growth.

"We are sharpening our presentation and focusing on our customers' needs more consistently.

"In Boss and Hugo we have two strong brands with their own identity, which appeal to different target groups," he added.

Mr Langer succeeded Claus-Dietrich Lahrs, who left the business in February after eight years at the helm of the 92-year-old German company when shares were at a five-year low following weak sales in the US and China.

Mr Lahrs had presided over rapid expansion which faltered when demand in China for luxury goods collapsed.

The share price fell 6% in Frankfurt on Wednesday in reaction to the efficiency drive.