German fashion house Hugo Boss is in talks with Chinese fashion retailer and frranchise partner Rainbow Group to start a joint venture to drive growth in China.
Sources told Reuters that “Boss is already working with Rainbow as a franchise partner in China and they now want to turn this relationship into a joint venture to be able to cope with rising growth rates in future.”
Hugo Boss has identified China as a key growth market and is investing in the region as it expands beyond its core European market.
Hugo Boss said that a decision had not yet been taken and declined further comment.
In a statement to Reuters Rainbow Group said because the matter “is sort of confidential business information and we are only one of the franchisee of Hugo Boss, we do not think it is appropriate for us to disclose such information or share our comment”.
Hugo Boss generates about 10% of its total revenue in the Asia-Pacific region and wants to more than double that to 21% by 2015.
Boss plans to open an average of 20 stores per year in China and has previously said a joint venture was an option.
Rainbow Group operates 31 Hugo Boss shops in Macao and 57 in major Chinese cities such as Shenzhen, Guongzhou and Beijing.
Rainbow Group operates other brand stores such as Escada, Ermenegildo Zegna and Emporio Armani.