Hugo Boss has revealed it is “adjusting” prices in Asia, where demand for premium and luxury products is falling, to bring them more in line with Europe and the US.
The German company is also scaling back distribution of its core Boss brand in the US, to mitigate against the impact of heavy discounting in that market.
The measures are designed to offset weaker than expected sales in China and the US, which Hugo Boss warned will hit its profits this year.
The company said its adjusted operating profit is now expected to fall at a low double-digit percentage rate, while a rise in sales is likely to be in the low single-digits.
It will cut some of its costs, but said this would only partially compensate for the lower prices in Asia and the limiting of distribution in the US.
Shares in Hugo Boss fell by around 20% yesterday following the announcement.
The brand said it would discuss its financial outlook in more detail when it presents its annual results on March 10, but added that it is confident it can continue to increase sales in the medium term and improve its margins in the future.