Annual Report 2023

Topics filter


Opportunities Report

The early identification and consistent exploitation of business opportunities is of particular importance as part of the successful execution of our “CLAIM 5” strategy and a key element in sustainably increasing the enterprise value. At HUGO BOSS, opportunities are defined as possible positive deviations from planned targets or assumptions in corporate planning.

Opportunity management

Responsibility for identifying, assessing, and exploiting business opportunities lies with the operational management in the respective regions, individual markets, and central functions due to its direct link to the targets of the respective business divisions. In this context, opportunities are always considered in conjunction with any associated risks. They are only pursued if they outweigh the associated risks and the risks are considered to be manageable and limited in their potential impact.

Short-term opportunities, defined as potential positive deviations from the planned operating result (EBIT) for the current fiscal year, are discussed at regular intervals with the management of the respective market or region, or with the central functions. If necessary, appropriate measures are initiated to exploit them. Long-term opportunity management is directly linked to our “CLAIM 5” strategy. Opportunities identified and assessed in terms of their contribution to the enterprise value are analyzed in detail several times a year as part of strategic planning. Based on this, the Managing Board allocates the necessary resources to the operating units to enable them to benefit from the realization of the respective opportunities.

Illustration of Opportunities

Overall, HUGO BOSS continues to see strong growth opportunities across its entire business model and is fully committed to leveraging these across both brands, all channels, and all regions also in the year to come. In particular, HUGO BOSS has identified the following relevant opportunities for 2024, which originate both in the corporate environment and in the “CLAIM 5” strategy, as well as in the operational execution itself.

External opportunities

As a global player in the apparel industry, HUGO BOSS can benefit directly from positive macroeconomic developments and their impact on consumer sentiment and buying behavior. For example, a faster-than-expected normalization of global inflation and interest rate levels or a stronger-than-expected rebound of global trade and investment flows might lead to stronger economic growth overall and thus to a noticeable uplift in global consumer sentiment. This, in turn, could have a fundamentally positive impact on the demand for premium apparel and accessories. In addition, social trends that emphasize the value of high-quality clothing more strongly than in the past could also support the top-line performance of HUGO BOSS regardless of the development of the overall consumer sentiment.

Regulatory and legal changes can have a potentially positive impact on the Company’s sales and earnings performance. For example, more consistent prosecution and punishment of infringements of trademark rights can positively impact the sales performance. In addition, the elimination of tariffs can improve the Group’s profitability.

Financial opportunities

Favorable exchange rate developments can have a positive impact on the Company’s earnings development. The Group Treasury department continuously analyzes the market environment and is responsible for identifying and exploiting relevant opportunities within the framework of financial management principles. Financial Position

Strategic and operational opportunities

As part of our “CLAIM 5” strategy, and following the successful implementation of our comprehensive brand refresh in 2022, we aim to further increase the relevance of our two brands BOSS and HUGO and thus keep driving top- and bottom-line growth in the years to come. With a broad range of premium apparel, shoes, and accessories, we intend to benefit, in particular, from the globally growing middle and upper class. In this regard, we are particularly focusing on younger customer groups, such as millennials and Gen Z, with the latter being particularly relevant for the premium apparel industry as it is estimated to make up the largest customer group in that sector by 2030. Group Strategy

Building on the robust top-line momentum recorded over the past years, the successful execution of “CLAIM 5” will remain key in fiscal year 2024 and beyond, to fully exploit opportunities across all business areas. Above all, and fully in line with our strategic claim “Boost Brands,” we will continue to build on the strong brand power of BOSS and HUGO and further engage with our customers to retain their loyalty. In particular, we will continue to put strong emphasis on spectacular, high-profile brand campaigns to significantly fuel brand relevance and win over new and younger target groups. On top of that, exceptional events and high-impact collaborations are intended to further increase brand relevance. To support future growth, we remain committed to keeping our marketing investments in a range of between 7% and 8% of Group sales also going forward. A further significant increase in brand relevance can have a positive impact on consumer demand and thus drive full-price sales, consequently resulting in higher-than-expected sales and earnings. Group Strategy, “Boost Brands”

At the same time, HUGO BOSS will continue to fully exploit opportunities in connection with further enhancing the appeal of its collections. Under the claim “Product is Key,” we will continue to focus on strengthening the 24/7 lifestyle brand images of BOSS and HUGO, thereby further leveraging opportunities to attract new customer groups across all wearing occasions. In this context, fully exploiting the great potential of the BOSS and HUGO brand lines will play a key role also going forward. At BOSS, we are operating our brand lines BOSS Black, BOSS Orange, BOSS Green, and BOSS Camel. With the latter being well received across key markets, we plan to further expand the BOSS Camel product offering going forward. At HUGO, the launch of HUGO BLUE in early 2024 offers potential to leverage the brands denimwear offering across a new and younger audience. On top of that, further extending our 24/7 lifestyle promise as part of our global licenses business offers additional opportunities. In that context, we already expanded into new lifestyle categories such as cycling or equestrian in 2023. Consistent exploitation of the various product-related opportunities may have a direct positive impact on the business performance of HUGO BOSS.

At the same time, we will keep investing in our product assortment to further optimize the price-value proposition in the coming years. In doing so, we aim to ensure premium quality, a high level of innovation and sustainability, and clear distinguishing features. We are also committed to exploiting the full potential of casualwear in the future, thus leveraging the ongoing casualization trend. At the same time, we aim to further strengthen our important formalwear business via a modern interpretation, thereby having already launched a number of innovative and functional products such as a washable or extra-warm flannel suit. With formalwear regaining momentum since the easing of the pandemic, both the formalwear and the casualwear segments offer enormous potential, which should enable us to continue to retain a leading position in the upper premium segment of the global apparel market. Group Strategy, “Product is Key”

As part of our strategic claim “Drive Omnichannel,” we will continue to fully leverage our high-quality channel mix on a global scale. In this context, we see particular opportunities to further drive traffic and conversion rates along all consumer touchpoints. Building on our strong brand power, we aim to further advance our omnichannel activities in the coming years. In this context, we aim to ensure a seamless brand experience across all consumer touchpoints. To this end, with the global rollout of our latest, much more emotional store concepts for BOSS and HUGO already in full swing, productivity in brick-and-mortar retail is aimed to further increase also going forward. Besides optimizing and modernizing our existing store base, we also plan to selectively expand our global retail footprint. We also strive to build on our regained strength in brick-and-mortar wholesale and further leverage the 24/7 lifestyle images of BOSS and HUGO, having already successfully increased visibility and market presence since the introduction of “CLAIM 5.” In addition, we will further strengthen our global franchise business by increasing the total number of full-price franchise stores over the coming years, with particular emphasis on emerging markets. With regards our digital business, we will focus on further driving traffic and conversion, particularly within our digital flagship and, at the same time, fostering growth with digital partners. Consistent exploitation of the various sales-related opportunities may have a direct positive impact on the business performance of HUGO BOSS. Group Strategy, “Drive Omnichannel”

At HUGO BOSS, we regard digitalization as key to a personalized, seamless omnichannel consumer experience, while also considering it to be a significant opportunity to further increase efficiency and flexibility along the entire value chain. As part of our claims “Lead in Digital” and “Organize for Growth,” we are pushing ahead with the further digitalization of all business activities – from digital trend detection and product creation to AI-enabled pricing, digital showrooms, and innovative experiences in the metaverse. The HUGO BOSS Digital Campus is at the heart of our digital journey, expected to further strengthen our digital expertise and take consumer experience to the next level through the targeted use of data. In addition, HUGO BOSS is implementing a digital copy of its value chain – the Digital TWIN – a smart and tech-driven business operations platform aimed at strongly enhancing real-time data utilization. This is aimed to further improve demand and logistics planning, inventory allocation, and transparency within the Company’s supply chain. Greater than expected successes in these areas may have a direct positive impact on the sales and earnings performance of HUGO BOSS. Group Strategy, “Lead in Digital,”  Group Strategy, “Organize for Growth”

In recent years, the overall importance of environmental and climate protection has increased sharply, also among consumers. Besides high-quality products and a unique shopping experience, customers today increasingly expect compliance with high ecological and social standards. We regard to the intensification of our diverse activities in the area of sustainability as an additional opportunity to win over new, sustainability-oriented consumers, while at the same time having a positive impact on society and environment alike. Sustainability is therefore an integral part of our “CLAIM 5” strategy. In this context, and fully in line with our commitment to strongly support creating a planet free of waste and pollution, we introduced a new sustainability strategy in 2023, aiming to significantly expand our circular product offering in the years to come, among other things. Besides direct opportunities in terms of revenue increases and cost reductions, we regard acting sustainably as an opportunity to further improve the general reputation of our Company and our brands. Sustainability, Combined Non-Financial Statement

Organizational opportunities

HUGO BOSS firmly believes that its employees are the essence of the successful execution of “CLAIM 5.” We therefore aim to promote a corporate culture in which the values of entrepreneurial spirit, personal ownership, team mentality, simplicity and quality, and youthful spirit are firmly anchored. They form the guiding principles for day-to-day cooperation and are intended to foster a spirit of mutual trust. This is accompanied by the opportunity to foster creativity and innovation, implement ideas and processes faster and more comprehensively, and consequently achieve competitive advantages.

As an international company, diversity, equity, and inclusion (DE&I) are fundamental parts of our corporate culture. We are convinced that heterogeneous and inclusive teams can achieve better and more creative solutions to complex issues and thus make a positive contribution to the successful execution of our “CLAIM 5” strategy. In recognition of the importance of the topic, HUGO BOSS has implemented numerous initiatives to ensure a discrimination-free working environment with equal opportunities and inclusive work culture for all employees. In addition, an internal diversity task force of employees with multiple backgrounds and from various locations and functional areas supports the execution of defined measures and promotes selected topics within our Company. We are convinced that intensifying our activities in the important area of DE&I positively contributes to employee satisfaction and is also considered a relevant factor by potential applicants.

HUGO BOSS aligns its Human Resources (HR) work with the goal of shaping the general conditions in the Company in a way that every employee is able to develop their individual talent to advance and to contribute directly to the successful execution of “CLAIM 5.” To this end, we particularly rely on the insights of our annual employee survey. Further successes in strategic HR work could have a positive impact on the Company’s sales and earnings performance in the future. Employees and Teams