Strategy
Group Strategy
The vision of HUGO BOSS is to be the most desirable fashion and lifestyle brand in the premium segment of the global apparel market. The Group is convinced that further elevating the desirability of its two brands, BOSS and HUGO, represents the most important factor for the Company’s long-term success.
In recent years, growth in the premium apparel industry has been driven by strong increases in casual-wear in particular, fueled by the rise of streetwear and athleisure. Customer behavior has also changed: consumers are predominately using digital channels to get inspired and discuss current trends as well as the offerings of individual brands. Customers demand a noticeably faster reflection of current trends in the collections, and their availability at anytime, anywhere – both in brick-and-mortar and online.
In order to account for the changes, HUGO BOSS is focusing on three strategic priorities: driving brand heat and product desire for its two brands BOSS and HUGO, resolutely exploiting global sales opportunities, and further driving its operational excellence.
Emotionalizing the Brands
In order to amplify brand awareness and strengthen the profile of BOSS and HUGO particularly among younger target groups, going forward, the brands’ marketing initiatives will focus on three pillars: firstly, highlight events with the goal to emotionalize the brands. Secondly, strong partnerships with influential personalities, and thirdly, exclusive collaborations with globally renowned and appealing brands and businesses. In doing so, the Company’s various communication initiatives will be centered on social media, and put strong emphasis on emotional storytelling aimed at further enhancing customers’ identification with the two brands.
Pushing Casualization
Given the strong global positioning of BOSS in the upper premium apparel market, and HUGO’s successful establishment in premium contemporary fashion, both brands offer a wide range of modern outfits. Over the last years, both brands have experienced comparably higher growth rates in casual-wear as compared to formalwear, first and foremost reflecting the global trend towards a more casual lifestyle. Further pushing the casualization of its business model – across brand, gender, and wearing occasion – will therefore remain a top priority for HUGO BOSS in the years ahead as well as continuing with breaking up the boundaries between casualwear and formalwear.
Leveraging the Online Business
The further expansion of its own online business is of strategic importance for HUGO BOSS and one of the Group’s key growth drivers. Investments in this channel have been significantly stepped up over recent years, thus successfully laying the foundation for future growth. By 2022, HUGO BOSS aims to generate online sales of more than EUR 400 million annually (2020: EUR 221 million). To achieve this target, the Group is leveraging the full potential of its online store hugoboss.com while, at the same time, continuing to expand its concession business.
Exploiting Growth Potential in China
HUGO BOSS is convinced about its significant growth potential in mainland China. As a result, HUGO BOSS expects ongoing strong momentum and robust underlying like-for-like growth both in brick-and-mortar retail as well as in its online business, supported by the Company’s ongoing focus on executing regional events with the support of local brand ambassadors. Besides continuously striving for further productivity increases in its brick-and-mortar retail business in mainland China, HUGO BOSS also sees the potential for further retail space expansion in that market. In addition, HUGO BOSS will also continue to max out all online opportunities in China.
Optimizing Sourcing without Compromising on Quality
HUGO BOSS puts a strong emphasis on increasing its efficiency in sourcing, without compromising on product quality. Further reducing the complexity of the BOSS and HUGO collections plays an important role in this regard. At the same time, HUGO BOSS continues to focus on strengthening its portfolio of strategically important vendors for finished goods and raw materials. During the last years, the Group has already reduced the total number of its suppliers while simultaneously expanding its business relationship with key suppliers, in particular in the area of casualwear.
Driving Digitization along the Entire Value Chain
The potential for digitizing its business model is to be harnessed along the entire value chain. In this context, HUGO BOSS is increasingly developing its products digitally, thereby shortening development times. This will allow the Company to react faster to market trends, thereby being even closer to true customer demand. In sales and distribution, the use of digital elements is becoming increasingly important in the Group’s brick-and-mortar stores. In particular, the integration of omnichannel services is designed to offer customers an elevated shopping experience. Already today, the Group is making use of digital sales tools when distributing its collections to wholesale partners.
To learn more about the HUGO BOSS Group Strategy visit our online annual report.
