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Leveraging global growth potential

Global brand awareness offers growth opportunities

HUGO BOSS is very well known around the world thanks to the appeal of its brands and its early entry into international markets, particularly through franchise partners. The Group sees substantial opportunities for commercially exploiting this brand perception in the coming years more than in the past and for gaining a firmer footing in markets in which the Group’s presence is still relatively weak, particularly fast growing markets. To this end, the Group will continue to expand its own retail business in particular. Overall, the proportion of non-European sales is expected to widen in the medium term.

Sales by region (in %)

Sales by region (in %) (bar chart)

1 Including Middle East and Africa.

Transformation of the business model the key to continued growth in Europe

However, Europe will remain the Group’s largest sales market. To this end, the Group is advancing the process-related, organizational and cultural transformation of its business model aimed at strengthening own retail. By expanding its own retail business, it is strengthening the homogeneity and perceived value of its global brand image and raising its appeal for local consumers as well as the growing number of non-European customers who visit the region as tourists. In addition, HUGO BOSS is increasingly managing wholesale space itself. Comprehensive process changes particularly in the areas of merchandise management, retail operations and customer service are additionally strengthening the organization’s retail competence. This has allowed the Group to generate growth that outstrips the sector average in many markets. Apart from expanding its market position in traditional core markets such as Germany, Great Britain, France and the Benelux countries, the Group sees attractive growth opportunities in Eastern Europe including Russia and in the Middle East.

Strong brand perception forms foundation for success in the Americas

HUGO BOSS enjoys a sturdy market position in the Americas. It is primarily anchored in a favorable perception shaped by associations with the European lifestyle. In addition to a modern design characterized by slim cuts, HUGO BOSS is seen as possessing a high degree of reliability with respect to fit and quality as well as an attractive value proposition. HUGO BOSS wants to increasingly also take advantage of these strengths in the parts of its portfolio that have previously had a less profiled presence, such as the luxury segment or womenswear. Womenswear should benefit in particular from the huge reputation that the new Artistic Director, Jason Wu, has in the region. In the Group’s own retail business, the focus is on selective new openings, process optimization and improvements to the shopping experience. In its wholesale business the Group is concentrating on strengthening the partnerships with retailers in the premium market segment to optimize its brand presentation and reduce discounting. The introduction of shop-in-shop formats, some of which are run directly by the Group, is an important tool in this respect.

Continued strong opportunities for growth in Asia

As the middle class steadily grows and premium and luxury goods become more affordable due to the accompanying increase in purchasing power, HUGO BOSS is seeing substantial sales potential opening up in Asia, and particularly in China. Notwithstanding the challenging market situation currently prevailing in China, the Group is investing in the quality of its retail presence and brand perception. The exclusivity of the brand presence is being augmented by opening flagship stores in cosmopolitan cities like Shanghai and Hong Kong, but also by renovating existing stores. Process improvements, the expansion of training activities and the implementation of structured IT-based customer relationship management also serve to improve the shopping experience. The full takeover of the previous “joint venture” activities in 2014 is also aiding the consistency of the brand presence. In its communication activities, HUGO BOSS stresses the brand’s heritage in menswear clothing, which accounts for a substantially lower proportion of sales in Asia than it does in other regions. Thus, a mobile exhibition, which is displayed in various luxury shopping malls, showcases the brand’s competence in high-quality menswear. In addition, further potential has been identified in luxury sportswear and womenswear, which is targeted at the fast-growing group of fashion-conscious professional women.

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