HUGO Boss AG is rerouting products made in China to non-US markets, in another sign of how President Donald Trump’s tariff war is reshuffling global trade.
Chinese-made apparel currently accounts for about 4% of Hugo Boss’s US volume. With those goods going elsewhere, the retailer is sourcing more products for the US market from countries such as Peru and Turkey, which are relatively less affected by tariffs, according to Chief Executive Officer Daniel Grieder.
The German fashion house is also stockpiling in the US to mitigate the effect of tariffs.
“We are trying to be open-minded and flexible to act in any direction,” Grieder said on an analyst call after Hugo Boss posted better- than-expected first-quarter earnings and confirmed its full-year outlook.
Shares of Hugo Boss rose as much as 10% on Tuesday before paring back some of the gains. The stock is still down about 15% since the start of the year.
Grieder, who has repositioned Hugo Boss for a younger audience, is aiming to address weak consumer spending since last year with efficiency gains and a David Beckham-led campaign to drive sales growth.
The US represents about 15% of Hugo Boss’s annual sales and became the brand’s single biggest market in 2023. Consumer sentiment has “really softened” in the US since the start of the year, however, as recession fears and Trump’s policies weigh on shoppers, said Grieder, who is currently in the country on business.
“The situation here in the States is very pressured,” Grieder said. “When you go into outlet centers, what is really a big concern is that the traffic went down something like 20% to 30%,” in the first few months of this year.
He said the company has yet to decide whether it will have to raise the prices of suits and shirts in the US as part of its tariff strategy.
“We are not just going in and just putting a price increase on the table,” he said as Hugo Boss will balance higher costs against the need to sustain customer loyalty.
“I think we have to do it in a smart way,” he said. –BLOOMBERG
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