London - It was clear that something had to change at struggling luxury brand Hugo Boss. The German fashion house placed its faith in the hand of Mark Langer, who was promoted to Chief Executive Officer in May following a series of profit warnings, and now the CEO has unveiled his strategic development plan to turn things around for the company.

During an Investor Day in London, Langer and the Mangaing Board of Hugo Boss shared their renewed company strategy which aims to set the company on a sustainable course towards profitable growth and a stable future. One of the key pillars of the new strategy will see the company focus its portfolio on its core brands Boss and Hugo and their positioning in the upper premium segment. The new strategy also see Hugo Boss introducing a global harmonization of its sales prices as well as key structural improvements to its distribution and a consistent worldwide brand image.

Digitalization is also a key part of the company's new strategy. Hugo Boss will intensify its focus on online as it will play an even more important role for the company going forward, both as a sales channel as well as a tool for connecting and communicating with customers. "By further developing our strategy we want to steer Hugo Boss back toward sustainable growth. We are sharpening our presentation and focusing on our customers’ needs more consistently", said Mark Langer, CEO of Hugo Boss AG in a statement.

"In Boss and Hugo we have two strong brands with their own identity, which appeal to different target groups. With Boss we want to be the most desirable brand in the upper premium segment. Positioning Hugo in future as a progressive brand with an attractive value proposition will open up extra growth possibilities for us." The repositioning of Hugo will see the company target a younger consumer group with more trend-driven styles at a fraction of the price of Boss.

Hugo Boss realigns its brand portfolio

In order to appeal to their loyal customers as well as attracting new customers, Hugo Boss will merge its existing brands and only operate two brands in the future, Boss and Hugo. Boss is set to offer upper, premium businesswear as well as casual wear. The company's former labels Boss Orange and Boss Green will no longer continue to function as independent brands and will integrated into the core Boss brand. The Hugo brand is set to appeal to a broader base of younger customers bu offering fashionable collection at attractive prices. Hugo's entry-level price range is set to be approximately 30 percent lower than that of Boss.

Hugo Boss aims to complete its brand portfolio realignment in time for the delivery of its Spring 2018 collection. The company also aims to focus more on its menwears collection and will therefore present its Boss menswear collection at New York Fashion Week next year in lieu of its Boss womenswear. However, the luxury label assures that it will continue working with its artistic director Jason Wu.

Global harmonization of sales prices and distribution

The luxury company also aims to harmonize its global price architecture by 2018, noting that any remaining difference will resulted from disparities in transport costs, taxes and customs changes. However, according to Hugo Boss while this means that it prices will decrease even more in Asia, its average prices in Europe are expected to increase slightly. It's price structure should remain stable in the United States.

Hugo Boss will also link its channels much more closely. Its assortment offered within the entry-level price range will be upgraded in terms of quality and expanded across all channels and the casualwear range in all Hugo Boss stores will be increased as well to meet customer demand. The company will also further develop its omnichannel services to help increase sales within Hugo Boss's own retail business over the next few years by 20 percent. On the other hand, Hugo Boss aims to slow down the expansion of its store network and magnify the importance of its online sales channel, which continues to grow for both Hugo and Boss.

E-commerce at the heart of Hugo Boss digital strategy

In order to improve its e-commerce business within the short term Hugo Boss has completely overhauled its website and launched a new mobile app. The website is currently being commercially optimized with a variety of measures planned. But the company also aims to implement changes to improve its distribution, logistics and sourcing. That is why Hugo Boss is designing its business processes across the entire organization to make them faster and more agile.

At the moment Hugo Boss is also working on developing a new process when its comes to collection design. The regular process is now being supplemented with a new concepts which sees best-selling items which have sold out being restocked within the season and individual pieces being added to the collection based on short-term trends.

Hugo Boss unveils new strategy for the long-term

Although the new strategy is set to help transform the struggling luxury brand, Hugo Boss still expects the operating results to decline by between 17 and 23 percent for the year. 2017 is predicted to be a year of stabilization, during which Hugo Boss will continue to consolidate its wholesale distribution in the Unites States in particular. The majority of the strategic changes will not become effective until 2018, which is when Hugo Boss is expected to return to growth.

Photos: Hugo Boss, Facebook