Strategy

HUGO BOSS believes that the desirability of its brands will be the most important factor in the Group’s long-term success. The objectives of employing the right people, maximizing customer satisfaction and offering the best products in the industry are in line with this fundamental concept and are predicated on profitable growth. The strategic framework for the Group strategy is formed of five attributes: First and foremost, HUGO BOSS wants to ensure that all its activities are more consistently aligned to the customer. Taking this as a basis, the Group must act in a digital, agile, sustainable and global manner in all areas. This requirement guides the Group’s specific actions within the following four strategic fields of action. 

Realigning the brand portfolio

In order to address customers clearly and consistently, the Company is now using two brands BOSS and HUGO commencing with the launch of the Spring/Summer 2018 collection. 

With its BOSS brand, the Company is reaching out to status-oriented, rationally-minded customers who wish to dress in a classic yet modern and high-quality style. The BOSS customer has exacting standards when it comes to quality and fit, and attaches great importance to an advantageous value-for-money proposition. The shopping experience must also meet the highest standards, particularly with regard to personal services. BOSS offers this customer confident businesswear and refined casualwear collections in the upper premium segment, characterized by the highest quality, sharp cuts and clear designs. BOSS invests in the value proposition of its products, particularly in the entry-level price range. The previously independently managed BOSS Orange and BOSS Green brands were integrated into the BOSS core brand as of the Spring/Summer 2018 collection in order to provide the customer with a consistent brand experience for all occasions – business, casual and athleisure.

In contrast to BOSS, HUGO is targeted at customers who are significantly more fashion-conscious and who consider their style of dress to be an important element in expressing their personality. The HUGO customer is open-minded, individual and spontaneous, and likes to shop, frequently doing so via online and mobile channels. HUGO offers this broad and generally younger customer base fashionable business and casualwear collections that are distinguished by their progressive designs and clear fashion statement. HUGO will remain anchored in the premium segment of the market. With its focus on contemporary fashion, the brand now stands apart from BOSS more clearly in terms of its fashion statement and pricing. Thus, HUGO prices are up to 30% lower globally than BOSS prices.

Womenswear remains an important part of the HUGO BOSS business. In terms of both fashion and price, the positioning of the two brands BOSS and HUGO in the womenswear mirrors that of menswear. The consistency of the fashion statements made by the menswear and womenswear collections is to be improved by harmonizing the color and theme concepts to a greater extent, while womenswear will benefit even more from the spill-over effects coming from menswear. At the same time, the fashion elements in parts of the collection will be increased substantially. The expansion of the casualwear product range also offers attractive growth opportunities.

Further refinement of the distribution strategy

HUGO BOSS is systematically aligning its distribution to its customers’ purchasing behavior. Both brands are sold via the Group’s own retail business as well as wholesale, via both bricks-and-mortar retail and online. In this connection, the Group attaches particular importance to a globally consistent brand image. Against this backdrop, retail prices have been largely harmonized in the various sales regions over the last few years. The significance of the Group’s own retail business will continue to grow. However, the Group also sees selective growth opportunities in wholesale.

Improving selling space productivity in its own retail business is currently the most important lever available to HUGO BOSS for growing its business. Thus, the Company has set itself the goal of increasing sales per square meter by 20% compared with 2016 to around EUR 13,000 per square meter by 2021.

The realignment of the brand portfolio and the related greater focus on the BOSS brand core in the upper premium segment provide crucial prerequisites for this. One key lever for improving selling space productivity is seen in efforts to enhance the shopping experience. In addition to changes to the range, service improvements will play a crucial role in this respect. Thus, HUGO BOSS has widened its training opportunities for sales staff to additionally improve the quality of service. As well as this, new store concepts were developed for BOSS and HUGO in 2017. With their appealing architectural features and greater use of digital elements, they invite shoppers to enter the store. In addition, HUGO BOSS is continuously improving its customer relationship management. Under the HUGO BOSS EXPERIENCE customer program, customers are able to qualify for added service and exclusive experiences and events.

HUGO BOSS considers digital business to offer great potential for growing retail sales. With this in mind, it is steadily optimizing the usability of its website hugoboss.com. The launch of a mobile app now also for the Android operating system addresses the growing share of users who use mobile devices to visit the site. Particular importance is being attached to growing omnichannel services in the Group’s own retail business. Today, for example, customers can check whether a product offered in the online store is also available in the nearest bricks-and-mortar BOSS store. Click & Collect – i.e. the instore pick-up of articles bought online – is already available in Europe and the United States. As well as this, Order from Store – i.e. online ordering of missing sizes or items in the store – is offered in Europe since fall 2017. This service is to be rolled out in the United States by the end of the year.

The Group sees potential for expanding the distribution of BOSS and particularly HUGO via selective new openings and the acquisition of shop-in-shops from wholesale partners. The Group also sees growth potential in the wholesale business by aligning its range more closely to the needs of its retail partners and expanding online cooperations. Conversely, the Company will be using lease expiries to close own retail stores that no longer meet the profitability requirements. Moreover, it reserves the right to continue adjusting its wholesale distribution if the brand presentation and environment do not live up to the requirements of BOSS and HUGO. Finally, the Company expects the wholesale market to continue seeing signs of consolidation in physical retailing and closures among smaller, often owner-operated specialist stores.

Digital transformation of the business model

Digitizing the business model offers HUGO BOSS attractive possibilities for increasing customer value and for improving efficiency. In doing so, the Group is building on its strong IT and logistics platform. The potential for digitizing the business model is to be harnessed along the entire value chain wherever this is economically viable.

The potential for digitizing the business model is to be harnessed along the entire value chain wherever this is economically viable. In the production process, the Company is focusing on implementing the digital transformation at its largest production plant in Turkey. On the road towards the “smart factory”, key milestones have already been passed with the digital networking of all production machinery, employees, processes and products. To achieve efficient utilization of its distribution and logistics capacities, HUGO BOSS relies on a uniform modern IT platform and high-level automation at its own distribution hubs. HUGO BOSS is also advancing digitalization in its wholesale business. Selected wholesale partners were able last year to order the HUGO Pre-Fall 2018 collection for the first time via a digital showroom specially developed by HUGO BOSS. The use of digital elements is also becoming increasingly more important in the Group’s own retail stores. In addition to the use of tablets, HUGO BOSS will be implementing large touch screens, among other things, in its customer service, allowing missing sizes and products available in other stores to be ordered.

Active transformation of the corporate culture

Speed often equates to economic success in the apparel industry. HUGO BOSS is therefore endeavoring to create its collections more quickly and flexibly. For this reason, the Company has complemented its regular development process with a “fast track” concept that will permit the rapid shipment of products that are based on short-term trends and the restocking of top-selling items within the season.

The formation of cross-functional teams and the delegation of clearly defined responsibilities will accelerate decision-making processes Group-wide and promote an entrepreneurial mindset. It was in this way that the new digital HUGO showroom was developed in only six months using the Scrum method.

The upper premium apparel market is changing at ever greater speed. HUGO BOSS must meet the ever-increasing demands of its customers and master the challenges of technological upheavals. To keep pace with these changes and remain successful in the long term, HUGO BOSS is working on an active transformation of its corporate culture. The Company wants to encourage its employees to embrace change in order to realize their own potential and create additional customer value.

Contact

HUGO BOSS AG
Corporate Responsibility
Dieselstrasse 12
72555 Metzingen
Germany

HUGO BOSS AG
Product
Dieselstrasse 12
72555 Metzingen
Germany

HUGO BOSS AG
Complaint
Dieselstrasse 12
72555 Metzingen

HUGO BOSS AG
Miscellaneous
Dieselstrasse 12
72555 Metzingen
Germany

HUGO BOSS AG
Privacy Policy
Dieselstrasse 12
72555 Metzingen
Germany

HUGO BOSS AG
Experience
Dieselstrasse 12
72555 Metzingen
Germany

HUGO BOSS AG
Sponsorship
Dieselstrasse 12
72555 Metzingen
Germany

HUGO BOSS AG
Investor Relations
Dieselstrasse 12
72555 Metzingen
Germany

HUGO BOSS AG
Made to Measure
Dieselstrasse 12
72555 Metzingen
Germany

HUGO BOSS AG
Press
Dieselstraße 12
72555 Metzingen
Germany

HUGO BOSS A
Career
Dieselstrasse 12
72555 Metzingen
Germanny

HUGO BOSS AG
Supplier
Dieselstrasse 12
72555 Metzingen
Germany

Subscribe to the Investor Relations Newsletter

Share Performance

Connect With Us
Contact

HUGO BOSS AG
Dieselstrasse 12
72555 Metzingen

Phone: +49 7123 94-0
Fax: +49 7123 94-80259

Follow us on: