Hugo Boss has recently launched an ambitious growth strategy known as “Claim 5” with the aim of doubling its sales to €4 billion by the year 2025. This new strategy encompasses all of their brands, touchpoints, and geographies. As part of this strategy, Hugo Boss plans to undergo a branding refresh in order to revitalize the relevance of their Boss and Hugo labels. The company intends to invest heavily in product development, branding, and digital efforts to attract a younger consumer base. Additionally, Hugo Boss has set a target of achieving a strong EBIT (earnings before interest and taxes) margin of around 12% by 2025.
The vision of Hugo Boss is to become a leading premium fashion platform driven by technology on a global scale, aiming to be ranked among the top 100 global brands. The five pillars of the Claim 5 strategy are: Boost Brands, Product is King, Lead in Digital, Rebalance Omnichannel, and Organize for Growth. These pillars are supported by the company’s commitment to sustainability and the empowerment of their people and teams.
Under the Boost Brands pillar, Hugo Boss plans to refresh their labels, logo, marketing campaigns, and retail and digital designs. Both the Boss and Hugo brands will undergo a complete transformation in terms of their look and feel. The company will also implement two distinct marketing strategies that heavily emphasize digital channels and exceptional collaborations to generate excitement and fully unlock the potential of the brands. Over €100 million will be invested in incremental marketing spend over the next few years.
The Product is King pillar focuses on creating products that can be worn for various occasions, 24/7. While prioritizing casualization and comfort, Hugo Boss will also ensure the premium quality, innovation, and sustainability of their products. This is in line with their goal to solidify their position in the premium/affordable luxury segment.
The Lead in Digital pillar involves further digitalizing all of Hugo Boss’ business activities throughout the value chain. This encompasses trend detection, digital product development, AI-enabled pricing capabilities, and the global introduction of digital showrooms. The company will establish a digital campus to enhance their digital capabilities and improve the consumer experience through data-driven initiatives.
The Rebalance Omnichannel pillar focuses on translating brand power into all consumer touchpoints. Hugo Boss plans to rebalance their distribution footprint and accelerate their omnichannel activities. They aim to increase their digital revenues to over €1 billion by 2025 and grow digital penetration to 25% to 30% of group sales. Additionally, the company is targeting a growth in brick-and-mortar retail revenues to approximately €2 billion by 2025 through increased store productivity and optimization of their global store network.
The Organize for Growth pillar aims to drive growth in all geographies while maintaining a balanced global footprint. The strategy includes a particular focus on Asia/Pacific, with a revenue share expected to exceed 20% within the next five years. Hugo Boss sees Mainland China as a key market and will concentrate on the Chinese consumer. In Europe, the company aims to sustain its leading position in premium apparel, with sales predicted to grow at a low- to mid-single-digit rate annually. Key markets such as Germany, the UK, and France are expected to play a significant role in growth through retail expansion, wholesale partnerships, and digital advancement. In the Americas, revenues are projected to grow at a mid-single-digit CAGR (compound annual growth rate) by leveraging the casualization trend in the US market.
Hugo Boss’ Claim 5 strategy clearly demonstrates their commitment to achieving rapid growth and becoming a leading global fashion brand. With an emphasis on branding, product innovation, digitalization, omnichannel expansion, and strategic geographical growth, the company has set ambitious targets to be reached by 2025. By revolutionizing their approach to consumer interactions, Hugo Boss aims to solidify their position in the premium fashion market and establish themselves as a top global brand.
Useful Links:
1. Hugo Boss Official Website
2. Reuters Article on Claim 5 Strategy
