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Hugo Boss buys back control of stores in China and Macau

Hugo Boss has bought its franchise partner Rainbow Group out of the joint venture that controlled its Chinese and Macau store portfolio.

Formed in July 2010, the partnership saw Rainbow Group take a 40% stake in the fashion house’s business in the region. Since then, the two parties have shared distribution rights across the region.

Hugo Boss bought back the 40% stake on June 30 for an undisclosed amount. As a result, it has assumed full control over the 55 stores operated by the joint venture in mainland China and Macau. These stores generated sales of €94m (£128m) last year.

Rainbow Group had been chosen for its “local market knowledge and sophisticated retail operations,” Hugo Boss said today. The partnership proved fruitful, with the brand’s business in China more than tripling since 2009.

“Over the last few years, we have firmly established Hugo Boss as one of the most highly recognised premium and luxury apparel brands in China”, said its chief executive Claus-Dietrich Lahrs.

He said buying back the stake “will further elevate the quality of brand presentation” and “increase productivity”.

At around 9% of group sales, China is its single biggest market in Asia and the fourth-largest market worldwide. At the end of 2013, it operated 126 freestanding stores and shop-in-shops in the country. Regional and local headquarters are based in Hong Kong and Shanghai, respectively.

Chinese fashion distributor Rainbow Group, owned by Terry Sio Un I, operates other brand stores such as Escada, Ermenegildo Zegna and Emporio Armani.

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