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HUGO BOSS Investor Day 2011 // Europe Strategy HUGO BOSS © November 8, 2011 2 / 19
Europe StrategyKnut Brokelmann, Regional Director Europe, Middle East, Africa & India
November 8, 2011
HUGO BOSS Investor Day 2011 // Europe Strategy HUGO BOSS © November 8, 2011 3 / 19
About me
■ Born 21 January 1968 in Stade, Germany
■ Education■ 1989-1991 Business Academy Bielefeld, Germany
■ Professional background■ 1991-1992 Sales Manager at Doerge Agency, London
Sales Representative for HUGO BOSS UK
■ 1992-1994 Sales Agent for Joop! Menswear, Germany
■ 1994-1998 Sales Director HUGO BOSS UK
■ 1998-2002 Managing Director HUGO BOSS UK
■ 2002-2008 Managing Director HUGO BOSS Australia
■ 2008-2011 Managing Director HUGO BOSS Germany & Austria
■ since 2011 Regional Director Europe, Middle East & Africa
KNUT BROKELMANN
HUGO BOSS Investor Day 2011 // Europe Strategy HUGO BOSS © November 8, 2011 4 / 19
EUROPE – The core region of HUGO BOSS
30% // Germany
13% // Benelux
12% // France 10% // Great Britain
35% // Other
62% // Europe13% // Asia/Pacific
22% // Americas
3% // Royalties
Sales by Market / Europe FY 2010
Sales by Region FY 2010
1,1701,041 1,073
Sales in Europe(in EUR million)
2008 2009 2010 2011e
1,057
2006
1,151
2007
■ Biggest and most profitable region within the Group
■ Unrivalled wholesale partnerships
■ Leading market positions in Western Europe
■ Strong recovery from crisis lows
HUGO BOSS ©
HUGO BOSS in Europe today
WHOLESALE PARTNERSWHOLESALE POINTS OF SALE
RETAIL POINTS OF SALE
POINTS OF SALECOUNTRIESEMPLOYEES~7.900 ~84
~2.800~4.400
~4.700
292
HUGO BOSS Investor Day 2011 // Europe Strategy HUGO BOSS © November 8, 2011 6 / 19
EUROPE - Key industry dynamics
■ Competitive market environment
■ Wholesale consolidation
■ New cooperation models between brands and wholesale partners
■ Growing importance of own retail
■ Emergence of new growth markets
HUGO BOSS Investor Day 2011 // Europe Strategy HUGO BOSS © November 8, 2011 7 / 19
Clear growth strategy in place
HUGO BOSS Investor Day 2011 // Europe Strategy HUGO BOSS © November 8, 2011 8 / 19
Dominant market position in menswear clothing with ample growth opportunities in other categories
WOMENSWEAR BOSS SELECTIONSHOES & ACCESSORIES
HUGO BOSS Investor Day 2011 // Europe Strategy HUGO BOSS © November 8, 2011 9 / 19
WHOLESALE – Further develop successful partnerships
■ Strong portfolio of leading wholesale partners
■ Attractive brand proposition
■ Superior sell-throughs
■ Reliable delivery and replenishment performance
Leveraging brand strength key to gaining space in wholesale
P&C KAERNTNERSTRASSE, VIENNA
HUGO BOSS Investor Day 2011 // Europe Strategy HUGO BOSS © November 8, 2011 10 / 19
RETAIL – Strong medium-term growth potential in retail
■ Targeted additions in Western Europe
■ Accelerated retail rollout in Eastern Europe
Retail to account for around 50% of European sales by 2015
Sales split by channel // Europe
2008 2009 2010 2011e2006 2007
Wholesale
Retail
79%
21%
76%
24% 25%
75%71%
29%
65%
35%
2015e
50%
50%
…
HUGO BOSS Investor Day 2011 // Europe Strategy HUGO BOSS © November 8, 2011 11 / 19
RETAIL – Active management of wholesale space an increasingly important distribution concept
■ Potential levers for productivity improvements:
■ Comprehensive control of merchandise flow and assortment
■ Targeted bestseller management
■ Superior customer service through dedicated staff
■ Attractive profitability profile
■ Several cooperations under way
HUGO BOSS Investor Day 2011 // Europe Strategy HUGO BOSS © November 8, 2011 12 / 19
RETAIL – Renovations offer potential for productivity gains
HUGO BOSS STORE, MILAN
■ Flexible space allocation due to modular brand concept
■ Upgrade of store furniture concepts
■ Optimized consumer flow
HUGO BOSS Investor Day 2011 // Europe Strategy HUGO BOSS © November 8, 2011 13 / 19
PROJECT D.R.I.V.E. – Implementation in full swing (I)
Example: 4-season cycle
■ Cycle shift fully reflected in retail
■ Fresher merchandise offering
■ Better adjustment to seasonal differences in consumer buying behavior
■ Increasing wholesale support
DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV
JAN FEB MAY JUL AUG NOV
PAST
FUTURE
2 main collections and 2 much smaller pre-collections
4 equally weighted collections based on actual consumer buying behavior
Full price sales curve
DEC APR JUN OCTMAR SEP
WHS
WHS
WHS
WHS
Current delivery curve
DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV
JAN FEB MAY JUL AUG NOV
PAST
FUTURE
2 main collections and 2 much smaller pre-collections
4 equally weighted collections based on actual consumer buying behavior
Full price sales curve
DEC APR JUN OCTMAR SEP
WHS
WHS
WHS
WHS
Current delivery curve
HUGO BOSS Investor Day 2011 // Europe Strategy HUGO BOSS © November 8, 2011 14 / 19
PROJECT D.R.I.V.E. – Implementation in full swing (II)
Example: 4-season cycle (cont.)
SPRINGOrder: ~ Jul / Aug
SUMMEROrder: ~ Oct / Nov
FALL Order: ~ Jan / Feb
WINTEROrder: ~ Apr / May
Spr
ing
1
Spr
ing
2
Spr
ing
3
Sum
mer
1
Sum
mer
2
Sum
mer
3
Fall
1
Fall
2
Fall
3
Win
ter
1
Win
ter
2
Win
ter
3
D J F M A M J J A S O N D
spring / summer core themes
fall / winter core themes
SPRINGOrder: ~ Jul / Aug
SUMMEROrder: ~ Oct / Nov
FALL Order: ~ Jan / Feb
WINTEROrder: ~ Apr / May
Spr
ing
1
Spr
ing
2
Spr
ing
3
Sum
mer
1
Sum
mer
2
Sum
mer
3
Fall
1
Fall
2
Fall
3
Win
ter
1
Win
ter
2
Win
ter
3
D J F M A M J J A S O N D
spring / summer core themes
fall / winter core themes
HUGO BOSS Investor Day 2011 // Europe Strategy HUGO BOSS © November 8, 2011 15 / 19
PROJECT D.R.I.V.E. – Implementation in full swing (III)
60% less retail complexity
Introduced in all markets… …with only limited exchange quotas
Consistent brand presentation across all markets
80% core range
max. 20% non-core
Example: Core range
HUGO BOSS Investor Day 2011 // Europe Strategy HUGO BOSS © November 8, 2011 16 / 19
Capitalizing on strong brand momentum in key markets
■ “Must have” brand in Menswear Clothing
■ Own retail opportunities in metropolitan areas
■ New cooperation models with wholesale partners
■ Strong brand perception based on perfect fit, high quality and superior value proposition
■ Group-leading retail competence
■ High-quality store base further strengthened through Moss Bros takeover
UK
Germany
HUGO BOSS Investor Day 2011 // Europe Strategy HUGO BOSS © November 8, 2011 17 / 19
Expanding brand presence in fast-growing markets
■ Take full control of distribution step-by-step
■ Extend own retail presence
■ Continuously invest into brand strength
Eastern Europe
HUGO BOSS Investor Day 2011 // Europe Strategy HUGO BOSS © November 8, 2011 18 / 19
SUMMARY
■ Region Europe set for continued growth
■ Good opportunities to leverage brand strength across portfolio of wholesale partners
■ Improving retail sophistication opens up new growth opportunities
