Strong volatility in the German equity market triggered by concerns over the outlook for the global economy

The German equity market entered the new year with substantial gains, reaching new historical highs in mid-April. This was driven by the ECB’s decision to expand its bond-buying program, the resultant depreciation of the euro and improved economic indicators in the Eurozone. Market conditions deteriorated appreciably in the course of the second quarter due to persistent worries about the Chinese economy, the disappointing performance of the U.S. economy and uncertainty surrounding Greece’s solvency. From mid-August, the Chinese government’s unexpected devaluation of the renminbi, massive declines in the Asian equity markets as well as further evidence of slower growth in China exerted additional pressure on the equity markets in Germany. In addition to the ECB’s continued commitment to its expansionary monetary policy, rate cuts by the Bank of China and the first moderate rate hike by the U.S. Federal Reserve in the fourth quarter triggered a recovery in the German equity markets. However, the backdrop of declining oil prices and increased global fears of terrorist attacks triggered sharp volatility.

The DAX closed the year 10% up on the final day of 2014. The MDAX advanced by 23% in the same period.

Deterioration in market environment for luxury goods companies exerted pressure on the HUGO BOSS share

During the first quarter of 2015, the HUGO BOSS share also benefited from the positive sentiment in the equity markets, reaching new highs. However, this upward trend was disrupted by the placement of the remaining share packages held by majority shareholder Permira and the financial outlook for 2015, which fell short of expectations. As the year continued, the share came under further pressure from the more muted outlook for growth in the premium and luxury goods industry particularly as a result of the slower momentum of the important Chinese market. In addition, industry growth softened in the U.S. market. The HUGO BOSS share was unable to shield itself from these developments and came under additional strain from the adjustment to the guidance for 2015 published by the Company in mid-October. At the end of the reporting period, the share was trading at EUR 76.60, down 25% on the end of the previous year (2014: EUR 101.70). Accordingly, the HUGO BOSS share declined more sharply than the industry average. The MSCI World Textiles, Apparel & Luxury Goods Index, which tracks the share price performance of companies operating in these sectors, retreated by 3% in 2015.