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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

L'Oreal 2Q Sales Grow 5.3%, Slower than Forecast

The logo of French cosmetics group L'Oreal is seen on a company building in Paris, France, February 7, 2024. (Reuters)
The logo of French cosmetics group L'Oreal is seen on a company building in Paris, France, February 7, 2024. (Reuters)
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L'Oreal 2Q Sales Grow 5.3%, Slower than Forecast

The logo of French cosmetics group L'Oreal is seen on a company building in Paris, France, February 7, 2024. (Reuters)
The logo of French cosmetics group L'Oreal is seen on a company building in Paris, France, February 7, 2024. (Reuters)

French cosmetics giant L'Oreal reported a 5.3% rise in second-quarter sales, below expectations and likely further rattling investors already worried about the lack of rebound in the important Chinese market.

The Paris-based company, which owns the Maybelline and Lancome brands, said on Tuesday that sales in the quarter reached 10.88 billion euros ($11.75 billion), up 5.3% on a like-for-like basis from a year earlier, but undershooting the 5.9% growth seen in a consensus compiled by Visible Alpha.

The company reported negative growth in the North Asia region, hit by weak consumer confidence in China and compared with the strong surge in demand at the same time a year ago.

L'Oreal CEO Nicolas Hieronimus had said last month that the global beauty market was growing more slowly than earlier predicted, at about 4.5%-5%, largely due to a lack of rebound in the Chinese market.

Shoppers in China, which has been one of the world's fastest growing beauty markets, are cutting back on spending over worries about job insecurity and a prolonged real estate slump.

The world's No. 2 economy grew less than expected in the second quarter, prompting consumers to buy fewer creams and lipsticks, both online and in stores.

L'Oreal, whose products span the mass market to the high-end luxury segment, had been expected to outpace its peers, but still see the impact of broadly slower growth.

Its sales in North Asia, which come mostly from mainland China, were down 2.4% like-for-like, compared with a decline of 1.1% in the first quarter.

"In mainland China, the beauty market was negative in the second quarter on a tough comparison base, exacerbated by lasting low consumer confidence," said the company in a statement.

Luxury bellwether LVMH last week said its perfumes and cosmetics sales grew 4% in the second quarter, slowing from 7% in the first three months of the year.

Shares in L'Oreal, Europe's 6th most valuable listed company, with a market capitalization of about 211 billion euros, have lost 12% so far this year, compared to a 31% fall at US peer Estee Lauder.