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Hugo Boss Sells Russian Business to Wholesale Partner Stockmann

The Hugo Boss logo is seen at one of the brand's stores in Hong Kong. CREDIT: BUDRUL CHUKRUT/AP
The Hugo Boss logo is seen at one of the brand's stores in Hong Kong. CREDIT: BUDRUL CHUKRUT/AP
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Hugo Boss Sells Russian Business to Wholesale Partner Stockmann

The Hugo Boss logo is seen at one of the brand's stores in Hong Kong. CREDIT: BUDRUL CHUKRUT/AP
The Hugo Boss logo is seen at one of the brand's stores in Hong Kong. CREDIT: BUDRUL CHUKRUT/AP

Hugo Boss has sold its Russian business to wholesale partner Stockmann for an undisclosed fee, the German fashion house said on Monday, joining the ranks of Western brands to exit the Russian market over the war in Ukraine.
The German fashion company suspended its retail business in Russia soon after Moscow invaded Ukraine in February 2022. It also paused its e-commerce activities in the Russian market and stopped advertising, Reuters said.
"We can confirm that our Russian subsidiary has been sold to Stockmann JSC - a company belonging to one of Hugo Boss's long-standing wholesale partners in the country," Hugo Boss said.
Neither party has disclosed financial terms of the deal, but Russia demands that foreign companies sell assets at discounts of at least 50%. Stockmann did not respond immediately to a request for comment.
Russian corporate filings showed that the deal closed on Aug. 2 and that Stockmann JSC now owns 100% of Hugo Boss Rus with a nominal value of 40 million roubles ($470,588).
Hugo Boss had come under pressure from organizations such as B4Ukraine for continuing to supply some goods to Russia. B4Ukraine is a coalition of civil society groups seeking to compel Western companies to sever ties with Russia.
"In terms of our wholesale business, we were fulfilling the contractual obligations to our partners," Hugo Boss said in April. "In this context, Hugo Boss is and has been complying with existing EU sanctions at all times."
Stockmann in Russia operates independently to its former Finnish owner, which sold its Russian business after Moscow's 2014 annexation of Crimea.

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Fashion

Uniqlo Owner Seen Posting 24% Annual Profit Surge on Brand’s Overseas Push

Fast Retailing's Uniqlo sign boards are displayed at a casual clothing store in Tokyo, Japan January 11, 2023. (Reuters)
Fast Retailing's Uniqlo sign boards are displayed at a casual clothing store in Tokyo, Japan January 11, 2023. (Reuters)
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Uniqlo Owner Seen Posting 24% Annual Profit Surge on Brand’s Overseas Push

Fast Retailing's Uniqlo sign boards are displayed at a casual clothing store in Tokyo, Japan January 11, 2023. (Reuters)
Fast Retailing's Uniqlo sign boards are displayed at a casual clothing store in Tokyo, Japan January 11, 2023. (Reuters)

The Japanese owner of casual wear giant Uniqlo is projected to beat its own forecast in what would be a third straight year of record profits as its brand makes inroads in western markets and its business in China recovers.

Fast Retailing's operating profit in the 12 months through August likely rose 24% from a year earlier to 478.3 billion yen, based on the average of 15 analyst estimates compiled by LSEG ahead of the company's earnings on Thursday.

That's marginally higher than the company's 475 billion yen forecast, which it lifted in July citing a strong performance in the second half.

Fast Retailing's shares have been on a tear, reaching a record high this week. Key factors going forward will be sales of fall and winter items in Japan and whether the company can reinvigorate its business in China, according to independent analyst Mark Chadwick.

"Investor attention will turn to whether Fast Retailing's measures in Greater China successfully reverse the earnings decline caused by weak consumer sentiment and increased competition," Chadwick wrote on the Smartkarma platform.

With more than 900 stores in China, Fast Retailing has long been seen as a bellwether for the retail sector in the world's second-biggest economy. COVID restrictions weighed on results there for years, but now the challenge is a sluggish economy that has weighed on consumer confidence.

Greater China CEO Pan Ning acknowledged in July that the market is maturing, with the company scaling back store openings and adopting a scrap and build strategy for underperforming locations.

When COVID lockdowns depressed sales in China, the company focused more on expansions in North America and Europe. Both sectors delivered strong sales and profits through the first nine months of fiscal 2024.

Company founder Tadashi Yanai aims to make Fast Retailing the world's biggest fashion retailer, with the operators of Zara and H&M standing in the way. He believes consumers are more focused on value than luxury in a post-COVID world, a trend that works in Uniqlo's favor.

Yanai, Japan's richest man, is scheduled to speak at the company's earnings briefing on Thursday, as well as Uniqlo president Daisuke Tsukagoshi, whom Yanai has spoken of as a possible successor.

Fast Retailing's shares have climbed 43% so far in 2024, outperforming a 16% advance in the benchmark Nikkei index.