Footfall drops by 20 percent at shopping malls in second and third tier cities in China

With the occasion of the release of its first half 2013 results, Hugo Boss‘ CEO Mark Langer said the number of people visiting malls in some smaller cities in China had fallen by as much as 20 percent, and that the group had to bring the quality of its mainland stores up to those in Hong Kong.

Hugo Boss Group reported second-quarter sales up 11 percent on a currency-adjusted basis to 532 million euros ($705 million) and earnings before interest, tax, depreciation, amortisation and special items (EBITDA) of 102 million euros for the quarter, up 31 percent. In the United States and Europe in particular, Hugo Boss benefited from an increase in spending by tourists from Asia and Latin America.

Gucci, owned by Kering Group, is among the major international luxury brands to have halted retail expansion in mainland China this year, focusing on refurbishing existing stores. Gucci’s CEO Patrizio di Marco recently told the FT: ‘we have to work harder in China because of a false perception that we are an ‘industrial company’.

French jeweller Cartier and fashion house Shanghai Tang, both owned by Richemont Group, closed 10 and 7 stores respectively in mainland China, in the past year. In April this year, Swiss luxury watchmaker Audemars Piguet announced the closure of 6 of its stores in China, of a total of 22.