Hugo Boss to expedite shop floor fashion

German Fashion House Hugo Boss is taking cue from the high street, aiming to cut the time it takes to bring its collections to the shop floor. Shoppers have a voracious appetite for new products introduced to store shelves regularly. The well-known high street

stores have weekly drops of new merchandise, allowing them to sell on-trend clothing and stay competitive.

With an impressive expansion plan, Hugo Boss aims increase its number of stores from about 450 this year to 700 by 2015, accelerating a transition towards higher-margin retail sales in fast-growing areas such as China, by emanating the high street.

Lead times to develop some Hugo Boss collections for next year are being cut from 50 to 38 weeks. “Shortening the times from collection development to production and delivery to the customer is crucial for our future success,” said Claus-Dietrich Lahrs, chief executive, in an interview.

The programme would be fully implemented for summer 2012 sales, Mr Lahrs said. Acknowledging that fast-moving fashion retailers such as Zara, owned by Inditex, and H&M use shorter lead times for products, Mr Lahrs said Hugo Boss would maintain its position as a premium brand, but wanted the “speed and reactivity” of those companies for Hugo Boss’s more fashion-driven items, which make up about one-third of sales.

He said the programme would also help cut complexity at Hugo Boss and deliver a more “focused” collection. “Unnecessary effort will be reduced as much as possible because we will have increased market intelligence.”

Hugo Boss, listed in Germany and majority owned by Permira, the private equity group, is trying to lift sales from €1.6bn ($2bn) last year to €2.5bn by 2015.

It plans to increase the proportion of sales from its own retail stores from about one-third to about half.

The company also aims to raise the percentage of sales it makes from accessories such as bags from about 12 per cent to 15 per cent.

Describing a “differentiated recovery” in global markets, Mr Lahrs said there were “good indications” for 2011 and added that Europe, where the company has about 70 per cent of sales, was “good news right now”.

Group sales rose 7 per cent in the second quarter to €325m, Hugo Boss said last month. Mr Lahrs joined Hugo Boss two years ago from LVMH, the French luxury goods group.

Image: Hugo Boss campaign
Source: FT