HUGO BOSS BRAND©

PRODUCT STRATEGY

The HUGO BOSS Group is one of the market leaders in the premium and luxury segment of the global apparel market. The Group, which is based in Metzingen in Germany and employs a workforce of almost 12,500 people, generated annual sales of EUR 2.4 billion in fiscal year 2013 and is among the world's most profitable apparel manufacturers of the apparel market with its brand world, HUGO BOSStargets different, clearly differentiated consumer groups.

BRIEF HISTORY 1924 Company founded by Hugo Ferdinand Boss 1970 HUGO BOSS developed into a fashion-lifestyle company 1985 Going public 2007 Permira takes over share majority 2012 Record sales and profits

Headquarters, Metzingen

The brands cover an extensive product range consisting of classic-modern business wear, elegant evening wear and sportswear, shoes and leather accessories, licensed fragrances, eyewear, watches, children’s fashion, motorcycle helmets, mobile phones and accessories, and home textiles. HUGO BOSS sells its products in 127 countries worldwide. Today customers can purchase HUGOBOSS products at more than 7,100 points of sale.

MANAGING BOARD

•Christoph Auhagen(CBO)

• Responsible for Brand Management, Creative Management, Sourcing and Manufacturing

Member of the Managing Board since December 2009.

• Mark Langer (CFO)• Responsible for

Controlling, Investor Relations, Finance,Legal and Compliance, HR, Logistics, IT and Central Services Director for Labor Relations.

• Member of the Managing Board since January 2010

• Claus-Dietrich Lahrs (CEO)

• Responsible for Distribution, Retail, Licenses, Communication and Global Replenishment.

• Member of the Managing Board since August 2008.

CORE IDENTITY

• The brand stands for innovation, creativity and progress

• The brand implements stringent design and quality standards to produce superior products that deliver value for money.

• All the brand collections adhere to a lifestyle philosophy featuring a distinctive brand signature

• The country of origin for the brand is Germany

EXTENDED IDENITTY

• The main fashion brand, BOSS, is modeled by a chisel-chinned hunk with the long hair of a racecar driver. He doesn’t look like he would be anybody’s boss though, more the maverick loner than a dynamic leader with your destiny in his hands. The women counterpart is a striking and arrogant-looking and in her late twenties

• The BOSS consumer no longer worries about "making it." He has achieved a success level that is beyond the norm, allowing him to enjoy the most luxurious cars, yachts and private jets the world has to offer. Men who choose BOSS are to be admired and envied in equal measure

EXTENDED IDENITTY

• The essence of Hugo BOSS fashion: Confidence, Power, Masculinity. Personal and professional goals achieved with easy self confidence

• The BOSS consumers have fun, enjoy life and take risks. They don't care about rules but live their life on their own way. Independent, unconventional and modern Creative people who are on the move. HUGO is the look and feel of London, Berlin and New York — the style for individualists.

BRAND POSITIONING

• Fashion statement dictates brand positioning

BRAND ARCHITECTURE

• The men’s wear collections is represented by the BOSS BLACK, BOSS SELECTION, BOSS ORANGE AND BOSS GREEN LINES AND THE HUGO-BRAND

• Strengthen product offering in luxury segment • Sharpen DNA of ‘Sportswear Elegance’ • Increase focus on the Asian consumer

• Offer the best price-value relationship in the premium segment • Enhance clarity of product branding

• Firmly establish BOSS Orange as key premium lifestyle brand at wholesale

• Convince in leading edge technical innovation • Strengthen distribution in golf performance accounts

• Maximize commercial potential of golf pro cooperation

BRAND ESSENCE

STRATEGIC RATIONALE

CUSTOMER / BRAND SEGMENTATION goes vertical

BOSS: Distribution to increasingly penetrate luxury segment

BOSS ORANGE / BOSS GREEN: Traditional positioning with enlarged distribution

HUGO: Refocus brand on tailoring

Key focus on premium department stores, relevant multi-brand retailers and pure online

Key focus on monobrand stores (incl. airports), SiS lifestyle presen-tations in key luxury departments stores, and opinion-leading wholesale accounts

Key focus on SiS lifestyle presen-tation and utilization for category expansion

VALUE PROPOSITION• Functional benefits include high-

quality, fashionable clothing with

European design

 

• Emotional benefits of this brand are

that it makes you feel like the

consummate sophisticate, for whom

only the very finest fabrics and

tailoring will do  

• Self-expressive benefits include its

ability to allow your self-expression

to have a strong sense of character

BRAND STRATEGY• Has high brand awareness – 90 – 100% amongst target

audience and Has high share of buyers within target group

• 40 – 60% buyers at BOSS BLACK/SELECTION/HUGO, 15 – 30% at BOSS ORANGE/GREEN

• Further leverage existing strengths to continue growth with BOSS BLACK in premium men’s wear

• Expand the share of business done with BOSS Selection to underline core competence in men’s wear (full canvas)

• Make sure that women get the same attention as men already enjoy

To make a more visible fashion statement with the shoes and accessories range

To avoid cannibalization, the focus will be on stand alone positioning for each brand in comparison with the past where brand architecture showed overlapping and similar price positions

Unlock the brand potential by developing retail strategies that will: Gain more control over brand and product presentation

Unlock potential in major growth markets with focused retail expansion in the right format

Intensify online shopping in key markets to benefit from growth story

Control factory outlet business more closely

Focus on geographical expansion to drive business outside Europe to: Be less dependent on mature markets in Western and Central Europe although there is still market share to gain

Benefit from double digit growth in emerging markets in Asia, Russia and Eastern Europe

Find the right access to mature markets such as the USA and Japan to capture the full momentum of the premium market

Deliver sustainable and profitable growth by: Monitoring and improving profitability of own retail

Managing trade partner profitability more stringently Reducing net working capital to a healthy level

Decreasing complexity in operations, sourcing and manufacturing as well as the supply chain

Performance initiatives launched in in anticipation of weakening market conditions:

Strengthening cost cautiousness and tight monitoring of cost drivers Retail turnaround

Fine tuning the regional price structure Net working-capital optimization

MAJOR COMPETITORS

REVENUE – BY PRODUCT CATEGORY

Boss Orange12%

Boss Green

8%

Hugo9%

Boss Black71%

Boss OrangeBoss GreenHugoBoss Black

REVENUE BY REGION

royalties2%

asia pacific14%

amer-icas24%

eu-ro-

pean countries60%

2013 SALES - EUR 2,432 million.

royaltiesasia pacificamericaseuropean countries

GLOBAL MARKET PRESENCE

Europe

Americas

Asia/Pacific

0 1000 2000 3000 4000 5000 6000

5100

1550

450

576

200

234

17

2

2

700

80

250

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