Hugo Boss (BOSSY)  shares extended losses Wednesday after the German fashion house's CEO said its restructuring efforts will only bear fruit in 2018 as the company scales back its ambitions of becoming a luxury brand.

Shares in the Metzingen-based group fell more than 10% by midday (6:00 am EST) in Frankfurt, changing hands at at €54.80 each and adding further misery for investors which have seen it fall more than 25% since the beginning of the year.

Declines had stabilized in the past three months, along with other luxury brands, after Boss signalled a recovery in China. Luxury peers LVMH (LVMUY) has gained 13.25% since the beginning of the year and Burberry  (BURBY) is up more than 16% over the same time period. LVMH and Burberry were down 1.4% and 2% respectively amid a wider European selloff Wednesday.

New CEO Mark Langer told shareholders and an investors event in London that the company will focus on two brands - the premium menswear line and its HUGO label aimed at younger shoppers - doing away with others brands including Boss Orange and Boss Green. The move will focus Boss on its core suits business.

"The company has decided to streamline its brand labels. This has been largely anticipated by the market and is likely to be seen as a positive. A number of labels is perfect for a wholesale model but as the company is now 60% exposed to retail the use of different labels is arguably confusing for consumers," analysts from Credit Suisse said in a note Wednesday.

The group said 2017 is expected to be a year of stabilization as it looks to further consolidate its wholesale distribution. The company said it anticipated returning to growth in 2018. Boss expects currency-adjusted sales to fall by up to 3% this year.

Prices, which can vary widely across the globe, will be harmonized by 2018. Further price decreases are expected in Asia, while prices in Europe will likely increase.

"We believe Hugo Boss faces a number of structural challenges in regard to its brand architecture and price positioning. We think that trading conditions will remain challenging for Hugo Boss in 2H16 and FY17. The US shows no imminent sign of recovery while space growth is falling and online growth has slowed," RBC Capital Markets analyst Claire Huff said in a note to clients.

This rounds off a troubled year for the fashion house, which has issued two profit warnings. The company also lost its CEO Claus-Dietrich Lahrs in February after it announced steep falls in sales in China and the U.S.

Langer said earlier this month that the group was aiming to find €65 million of savings, €15 million more than those announced in May. In the third-quarter, the company reported a fall of 6% in like-for-like sales, with sales in China picking up.

In a note sent out earlier this month Jefferies analysts said they were encouraged by the initiatives. "The trajectory of recovery is often not linear but we think management is displaying sufficient grip on the business to spark investor interest with BOSS trading on c16x 2017 PE vs peers on c22x," the analysts said.

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