Global sourcing and distribution activities

HUGO BOSS sources roughly 20% of its procurement volume internally. In addition, products are manufactured by independent suppliers that are mainly located in Eastern Europe and Asia. The Group sells its collections in 130 countries around the world. The Group’s sales regions are Europe (61% of sales), the Americas (23% of sales) and Asia/Pacific (14% of sales). In addition, 2% of sales are generated from licenses. Sourcing and Production Sales and Profit Development of the Business Segments

Group’s own retail business the most important sales channel

Over the last few years, HUGO BOSS has expanded its own retail business significantly. In fiscal year 2014, 57% of Group sales were generated in this sales channel. The number of points of sale owned by the Group rose by a net 31 to 1,041. These include freestanding stores operated by the Group in prime locations, shop-in-shops operated by the Group on multibrand retail space, particularly that of department store partners, and factory outlets. At the same time, online sales are also gaining in importance. At present, the Group operates eleven online stores in Germany, Great Britain, France, Spain, Italy, the Netherlands, Belgium, Austria, Switzerland, the USA and China. Wholesale business contributed 41% to Group sales in fiscal year 2014. Wholesale partners include department stores, specialist retailers, which are frequently family-run, franchise partners and, to a lesser extent, specialist online retailers. Department stores and specialist retailers sell HUGO BOSS products either in separate shop-in-shops or in a multibrand setting. Franchise partners operate freestanding HUGO BOSS stores in accordance with the Group’s specifications and particularly operate in small markets not addressed by the Group’s own retail business. In total, HUGO BOSS products can be bought at around 7,600 wholesale points of sale. Group Strategy General Economic Situation and Industry Development