Hugo Boss launches ambitious new strategy to drive fast growth
Hugo Boss has a new growth strategy called Claim 5 that aims to double its sales to €4 billion by 2025. It will accelerate growth across all brands, touchpoints, and geographies and will include a “branding refresh to revitalise and elevate [the] relevance of Boss and Hugo”.
The firm will see “significant investments in product, brand, and digital to win over a younger consumer” and targets a return to a strong EBIT margin level of around 12% by 2025.
“It is our vision to become the leading premium tech-driven fashion platform worldwide and in this context, we will revolutionise the way in which we interact with consumers,” said Daniel Grieder, its new CEO. “Our ambition is to double our business and to become one of the top-100 global brands.”
Claim 5 is based on five pillars: Boost Brands, Product is King, Lead in Digital, Rebalance Omnichannel, and Organize for Growth.
It also includes “a bold commitment to sustainability, together with a strong executional road map and a clear plan on empowering people and teams”.
Boost Brands includes refreshing the labels from logos to marketing, to brand new designs in retail and digital. Customers “will experience both brands in a completely new look and feel”.
Two clearly distinguished marketing strategies – “with a strong focus on digital as well as exceptional collaborations – are set to create excitement among consumers and unleash the full potential of Boss and Hugo”. Incremental marketing spend will be more than €100 million between now and 2025.
Product is King will “create products to be worn 24/7 across all different wearing occasions. While casualisation and comfort are key, Hugo Boss will strongly invest in its price-value proposition to ensure premium quality as well as high levels of innovation and sustainability”. It aims to “foster its unique positioning in the premium/affordable luxury segment”.
Lead in Digital includes a strong commitment to further digitalising the company’s business activities along the entire value chain, from trend detection and digital product development to AI-enabled pricing capabilities and the global rollout of digital showrooms. This also includes establishing a digital campus to further expand the company’s digital capabilities and to improve the consumers’ experience by leveraging data.
Rebalance Omnichannel will “translate brand power into all consumer touchpoints”. Hugo Boss “will rebalance its distribution footprint and strongly accelerate its omnichannel activities in the years to come”. Boosting its digital revenues to more than €1 billion by 2025 will be a key element and it wants to grow its digital penetration to a level between 25% and 30% of group sales.
But it also aims to “unleash the full potential of retail as it aims at growing brick-and-mortar retail revenues to around €2 billion by 2025”. Growth will be driven by “an increase in store productivity of around 3% per year, as well as the further optimisation and refreshing of the company’s global store network”.
Organize for Growth “will drive growth across all geographies while further balancing its global footprint”. Asia/Pacific’s revenue share will grow to more than 20% within the next five years. Mainland China will continue to be of particular importance, with the company putting a strong focus on the Chinese consumer in the years to come.
But it’s equally committed to fostering its leading position in premium apparel in Europe, where sales are forecast to grow at a low- to mid-single-digit rate annually. Key markets such as Germany, the UK, and France “are all set to strongly contribute to growth by unleashing their full potential in retail, reclaiming wholesale with strong partners, and driving digital growth across all consumer touchpoints”.
In the Americas, revenues are projected to grow at a mid-single-digit CAGR between 2019 and 2025, “as the company will strongly push the 24/7 brand image by fully leveraging the casualisation trend in the important US market”.
Copyright © 2021 FashionNetwork.com All rights reserved.