There is no doubt that multinational corporations and conglomerates specializing in luxury and fashion are some of the industry’s most successful businesses. Think LVMH, Kering, Farfetch and New Guards Group, Richemont, OTB, Capri Holdings, Inditex, Swatch, etc, and think of these businesses each controlling a small number of houses and brands.
German power house Hugo Boss, the Metzingen-based brand which generated 2.9 billion euros in sales in 2019, will know that the global luxury market, currently worth 300 billion dollars, is generated from just 10 groups. Even a small slice of the pie could net huge profits.
This is why Hugo Boss in its next phase of growth could consider acquiring other brands. In an interview with Manager Magazin, Hugo Boss Chief Executive Daniel Grieder clearly outlined: “We are pursuing a platform approach that will allow us to grow further also through acquisitions” adding that he noticed particular potential in Europe’s premium sector.
With ambitious sales targets to reach 4 billion euros by 2025 Hugo Boss may need to do more than sell its own product to double sales. “Our vision is to become the leading technologically advanced fashion platform across the world, and to do so we will revolutionize the way we interact with consumers,” Grieder stated.
Brand Finance, the ranking experts, have calculated the brand value of the Hugo Boss brand 9 times between 2013 and 2021. The Hugo Boss brand valuation has featured in 17 brand rankings, including the strongest and most valuable Europe brands, the biggest Apparel brands and the best German brands.
The question, of course, is which brands would be interesting acquisitions for Hugo Boss. A leader in the premium lifestyle sector, Hugo Boss has a solid business model that sees 17 percent of its total sourcing volumes come from its own facilities. Wholesale is at 30 percent of the company’s turnover, which could potentially be lowered and growth achieved via its own retail and e-commerce channels. Its centralised warehousing in Germany seamless distributes its products to 47 international markets.
Who’s the Boss?
Grieder said it was his ambition to make Hugo Boss one of the world’s top 100 global brands including by spending more than 100 million euros on marketing between now and 2025.