While introducing a new 2025 growth strategy ‘Claim 5’, Hugo Boss Ag aims to double sales to 4 billion euros by 2025, which implies a CAGR of 16 percent taking 2020 as the base year and 6 percent as compared to the pre-pandemic level of 2019.
The company said in a statement that to successfully deliver on its strategy, it will step-up investments into its products, brands, digital capabilities, as well as its global store network, all aimed at fueling top-line growth.
Until 2025, gross margin is forecast at a level of between 60 percent and 62 percent and the company is confident of returning to a strong EBIT margin of around 12 percent by 2025, translating into an EBIT CAGR of 6 percent between 2019 and 2025.
“It is our vision to become the leading premium tech-driven fashion platform worldwide and in this context, we will revolutionize the way in which we interact with consumers,” says Daniel Grieder, chief executive officer of Hugo Boss Ag, adding, “Our ambition is to double our business to 4 billion euros in revenues by 2025 and to become one of the top-100 global brands.”
Hugo and Boss brands to get refreshed look, digital to be in focus
Important features of the company’s ‘Claim 5’ strategy include: boost brands, product is king, lead in digital, rebalance omnichannel, and organize for growth.
As part of the plan, the company plans to refresh Boss and Hugo – from logos over marketing, to new designs in retail and digital. The company aims to achieve around 2.6 billion euros in Boss menswear sales and to double Boss womenswear sales to around 400 million euros by 2025. The company also aims at driving around 800 million euros of sales for Hugo, while the company’s license business – covering a variety of products including fragrances, watches, and eyewear, among others – is set to contribute 200 million euros of revenues by 2025.
The company added that the Hugo Boss digital campus, based in Metzingen, Germany and Porto, Portugal, will strengthen its online activities as well as analytical, technical, and executional capabilities. Overall, the company will step up its investments into digital by more than 150 million euros by 2025. Boosting its digital revenues to more than 1 billion euros by 2025 will be a key element and enable Hugo Boss to grow its digital penetration to a level between 25 percent and 30 percent of group sales.
The company also aims at growing brick-and-mortar retail revenues to around 2 billion euros by 2025. In this context, around 80 percent of the company-owned stores will be refurbished during the next three years, with overall investments into brick-and-mortar retail targeted to total around 500 million euros for the period until 2025. Hugo Boss also intends to increase brick-and-mortar wholesale revenues to a level of around 1 billion euros by 2025.
Hugo Boss to target sales growth across geographies
The company further said that in Asia/Pacific, revenues are set to grow at a low-teens compound annual growth rate. As a consequence, the region’s revenue share will grow to more than 20 percent 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 also in the years to come.
The company will also continue to foster its leading position in premium apparel in Europe, where sales are forecast to grow at a low- to mid-single-digit rate per annum. Key markets such as Germany, the UK, and France are all set to strongly contribute to growth.
In the Americas, the company said, 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 casualization trend in the important U.S. market.