FRANKFURT (Reuters) - German fashion house Hugo Boss (BOSSn.DE) scrapped its sales target for 2015 because of slower spending on upmarket brands in Europe, the United States and China, sending its shares lower.
Like other companies targeting more affluent customers, Hugo Boss has been hit by lower spending abroad by Russian and Chinese shoppers.
Its original revenue target of 3 billion euros ($3.18 billion) should be achievable in 2016 rather than this year, Chief Executive Claus-Dietrich Lahrs said on Thursday.
Lahrs confirmed the company planned to concentrate more on the luxury business and raise prices significantly, adding that the main Boss brand would in future only be sold in the company’s own stores.
The group now expects group sales this year to rise by a figure of around five percent from 2.57 billion euros in 2014.
While many analysts had expected Hugo Boss to trim its 2015 forecast due to tough market conditions, they had hoped the cut would not be so deep. On average, analysts had been expecting 2015 sales of 2.83 billion euros and 3.03 billion for 2016, according to Thomson Reuters data.
Hugo Boss shares slid as much as 4.4 percent, making them the biggest faller on a flat German mid-cap index .MDAXI. By 7.55 a.m. EDT the shares were down 1.5 percent at 117.30 euros.
Hugo Boss is seeking to better promote its brands to achieve higher margins, pulling back from wholesale and investing in its own retail shops.
Against this backdrop, it expects its 2015 earnings before interest, tax, depreciation and amortization (EBITDA), adjusted for special items, to increase between 5 and 7 percent, compared with 6 percent in 2014.
In 2015, Hugo Boss aims to open around 50 new stores in addition to its existing 1,041 shops. The group, best known for its premium menswear, is also expanding its clothing for women.
Under the guidance of Jason Wu -- a favored designer of U.S. First Lady Michelle Obama -- the womenswear business grew 18 percent over the previous year and contributed around 11 percent of group sales in 2014.
Additional reporting by Ilona Wissenbach; Editing by Keith Weir