German fashion retailer Hugo Boss sees Asia as a cornerstone of its growth strategy, saying while it already enjoys above-average growth in the region, there is potential for more.
In a briefing to investors in London, the company’s managing board said it expects Asia will account for 20 per cent of its global sales by 2022, up one third from the current 15 per cent.
“The board is convinced the group still has considerable growth potential particularly in Asia. Sales in the region are expected to increase on average at a double-digit percentage rate per year by 2022, with China playing a key role,” the company said in a statement.
“In addition to the optimisation and expansion of the local retail network, the online business, also in cooperation with various multi-brand platforms, should contribute to above-average sales growth in particular.”
Globally, Hugo Boss will focus on personalisation and speed to boost brand desirability between now and 2022. The company plans to increase currency-adjusted sales by between 5 per cent and 7 per cent annually for the next four years and grow its operating margin to 15 per cent. Operating profit will grow “significantly faster than sales,” the company said.
“We have set ourselves high targets for the coming years”, said CEO Mark Langer.
“We want to grow faster than the market, and expect our operating profit to develop significantly better than our sales. The successful realignment of our brands Boss and Hugo has laid the foundation for this. We will further increase the personalisation of our offerings in the future and speed up central processes in the course of further developing our strategy. Our overall aim is clear: We want to be the most desirable premium fashion and lifestyle brand globally.”
Personalisation will be developed by adopting a more individualised customer approach, a personalised product range, “a unique shopping experience” and by building on its extensive experience in made-to-measure clothing.
On the speed front, Hugo Boss plans to make its business processes “considerably more agile”.
“This will enable the company to react to customer needs and to new market trends even more quickly and flexibly in the future. The existing skills of Hugo Boss in product design and development, our modern logistics and IT infrastructure and the use of digital showrooms will be the key levers,” the company said.
It also plans to quadruple its own online sales by 2022.