Hugo Boss has come under fire for growing its retail arm with little thought for its independent stockists, with some businesses accusing the brand of plotting a complete exit from smaller stores.
It comes after the company last week revealed a 6% rise in own retail sales and plans to open 50 stores worldwide by 2016, building on an increase of 19 shops since December 31, 2014. The expansion would raise its total store count to 1,110.
Meanwhile, its wholesale sales dropped 2% during the first quarter of 2015, a decline Hugo Boss said it expects will continue for the rest of the year.
One southeast England retailer who has stocked Hugo Boss since 1988 said it has reduced the number of independent stockists by about 30% in recent years.
“We aren’t getting the service we used to get and we do feel neglected,” he said. “I wouldn’t be surprised if in seven years it is only trading out of its own stores.”
Other stockists of the German business’s mainline, as well as diffusion lines Boss Orange, Boss Green, Boss Black and Hugo, believe the company is implementing increasingly strict payment terms and high minimum orders.
The director of one menswear store in the north of England suggested that, while wholesale prices haven’t increased, high minimum order values were pricing small retailers out of carrying the ranges.
“Over the last two or three years, they’ve decided you must spend X amount on Green and X amount on Orange, then on footwear you must pick four styles, and you must buy two or three belts.”
The managing director of another store agreed that forcing buyers to opt into all categories was putting them under pressure, saying: “The minimums they set, such as buying into four collections a year, gives the impression that if ‘you’re small we don’t need you’.”
Hugo Boss did not respond to Drapers’ request for comment.
In March, Hugo Boss regained control of its Asian and Middle Eastern growth markets by cutting ties with its franchise partners in South Korea and taking over all 17 stores there. It said this contributed to the 2% drop in wholesale revenues.
The following month, it took back 21 Boss franchise stores in China, bringing the total number of standalone stores on the Chinese mainland to about 130.