Hugo Boss AG · XETR:BOSS
Hugo Boss — Investor Day (November 2011)
33 slides from Hugo Boss's investor day presentation, Nov 8, 2011
Slide 1: HUGO BOSS
HUGO BOS S$
Slide 2: Americas Strategy
Americas Strategy Mark Brashear, Chairman & CEO Americas November 8, 2011 HUGO BOSS Investor Day 2011 // Americas Strategy HUGO BOSS © November 8, 2011 2 / 33
Slide 3: About me
About me ■ Born 20 August 1961 in California, USA ■ Education ■ 1983 Bachelor of Science and Commerce Degree in Finance, Santa Clara University ■ Professional background ■ 1993-1996 Store Manager at San Francisco Centre and Hillsdale Mall ■ 1997 Divisional Merchandise Manager, MARK BRASHEAR Men’s Ap
Slide 4: Agenda
AGENDA INTRODUCTION HUGO BOSS IN THE AMERICAS KEY AMERICAN MARKETS SUMMARY AND OUTLOOK HUGO BOSS Investor Day 2011 // Americas Strategy HUGO BOSS © November 8, 2011 4 / 33
Slide 5: Agenda: Hugo Boss in the Americas
AGENDA INTRODUCTION HUGO BOSS IN THE AMERICAS KEY AMERICAN MARKETS SUMMARY AND OUTLOOK HUGO BOSS Investor Day 2011 // Americas Strategy HUGO BOSS © November 8, 2011 5 / 33
Slide 6: HUGO BOSS in the Americas today
HUGO BOSS in the Americas today ~1.300 ~25 ~1.200 EMPLOYEES COUNTRIES POINTS OF SALE 120 ~1.100 ~400 RETAIL WHOLESALE WHOLESALE PARTNERS POINTS OF SALE POINTS OF SALE HUGO BOSS ©
Slide 7: Americas – A dynamic growth region
AMERICAS – A dynamic growth region Sales by Region FY 2010 ■ Strong top line momentum 3% // Royalties ■ Second-largest region within the Group 13% // Asia/Pacific 62% // Europe ■ North America accounting for vast majority of business 22% // Americas Sales in Americas Sales by Market / Americas FY 20
Slide 8: Vision for the Americas
Vision for the Americas ■ Build HUGO BOSS Americas into a world class organization of talented leaders who deliver strong results consistently, who build team, inspire others and lead by example ■ Focus on building our business one customer at a time, through customer service and selling skills ■ Th
Slide 9: Major achievements
Major achievements ■ Best financial results in the history of the region ■ Enhanced brand repositioning ■ Brand presentation ■ Selective partnerships ■ Growth in key categories Net sales growth (in %, fx adjusted) ■ Relevant connections with targeted customers 25% 25% ■ Increased operating efficienc
Slide 10: Long-term development strategies
Long-term development strategies ■ Multi-channel strategy and coordination of channel expansion: ■ Retail ■ Wholesale ■ e-Commerce ■ Development of own retail competencies and execution across all channels ■ Increased responsiveness to demand ■ Acting upon real-time business performance ■ Merchandis
Slide 11: Key market dynamics
Key market dynamics ■ Uncertainty in the state of the economy, consumer confidence ■ Volatile financial markets affecting psyche of luxury customers ■ USD weakness ■ Importance of relationship management with key retailers ■ More competition in menswear market HUGO BOSS Investor Day 2011 // Americas
Slide 12: Agenda: Key American Markets
AGENDA INTRODUCTION HUGO BOSS IN THE AMERICAS KEY AMERICAN MARKETS SUMMARY AND OUTLOOK HUGO BOSS Investor Day 2011 // Americas Strategy HUGO BOSS © November 8, 2011 12 / 33
Slide 13: Organizational and operational structure
Organizational and operational structure TORONTO Showroom and Sales – Canada Distribution Center CLEVELAND Manufacturing NEW YORK Showroom, US Sales, Marketing Executive, Regional Management SAVANNAH Distribution Center Support functions: IT, Real Estate MEXICO CITY Sales – Mexico Latin America Admi
Slide 14: Distribution – Retail strategy
DISTRIBUTION – Retail strategy ■ Own retail store roll-out ■ Penetration into third-tier cities in the US ■ Merchandising and product flow ■ Planning, allocation and flowing of products based upon performance ■ Customer Service ■ Enhancing customer experience through knowledge and service ■ Store Op
Slide 15: Key Retail Store Openings and Renovations
DISTRIBUTION – Retail strategy Key Retail Store Openings and Renovations HUGO BOSS HOUSTON HUGO BOSS BOSTON COPLEY HUGO BOSS Investor Day 2011 // Americas Strategy HUGO BOSS © November 8, 2011 15 / 33
Slide 16: Distribution – e-Commerce strategy
DISTRIBUTION – e-Commerce strategy ■ Expand merchandise assortment ■ Optimize performance & email marketing ■ Enhance site regional relevance ■ Payment, fulfillment, and multi-channel advancements HUGO BOSS Investor Day 2011 // Americas Strategy HUGO BOSS © November 8, 2011 16 / 33
Slide 17: Distribution – e-Commerce strategy: sales development
DISTRIBUTION – e-Commerce strategy Strong development of e-commerce channel in the region e-Commerce sales development (in EUR million) 35 32.0 +18% 30 27.2 25 +56% 20 17.4 15 +86% >100% 9.4 10 >100% 4.3 5 2.0 0 2010 2011e 2012e 2013e 2014e 2015e HUGO BOSS Investor Day 2011 // Americas Strategy HU
Slide 18: Distribution – Wholesale strategy
DISTRIBUTION – Wholesale strategy ■ Partnership with key retailers ■ Selective, high-end US department stores ■ Key retailers in Canada and Latin America ■ Demand management ■ Maximize order fill rate and replenishment ■ Specific product development through regional collaboration ■ Brand presentatio
Slide 19: Distribution – Wholesale key partners
DISTRIBUTION – Wholesale key partners % to total market Wholesale Sales CANADA Harry Rosen Holt Renfrew 52% The Bay US Nordstrom Neiman Marcus 70% Saks Bloomingdale’s Macy’s MEXICO Palacio de Hierro Liverpool 39% Lamberti de Mexico HUGO BOSS Investor Day 2011 // Americas Strategy HUGO BOSS © Novembe
Slide 20: Distribution – Wholesale
DISTRIBUTION – Wholesale Breakdown of US wholesale business by customer group (FY 2010) Others 71% // Department Stores Franchise 14% // Macy’s Specialized 29% // Nordstrom Stores 13% // Bloomingdale’s Lord & Taylor 9% // Saks Fifth Avenue Dillard’s HUGO BOSS Investor Day 2011 // Americas Strategy H
Slide 21: Wholesale success stories
DISTRIBUTION – Wholesale success stories Nordstrom partners in excellence award HUGO BOSS Investor Day 2011 // Americas Strategy HUGO BOSS © November 8, 2011 21 / 33
Slide 22: Wholesale key initiatives
DISTRIBUTION – Wholesale key initiatives ■ Comprehensive shop-in-shop Number of shops 2010 2011e 2012e roll-out plan with Saks and Bloomingdale's 1 7 14 Bloomingdale's Saks 1 8 13 Total 2 15 27 HUGO BOSS Investor Day 2011 // Americas Strategy HUGO BOSS © November 8, 2011 22 / 33
Slide 23: Wholesale key initiatives
DISTRIBUTION – Wholesale key initiatives SAKS 5TH AVENUE NEW YORK WOMEN’S SHOP HUGO BOSS Investor Day 2011 // Americas Strategy HUGO BOSS © November 8, 2011 23 / 33
Slide 24: Agenda: Summary and Outlook
AGENDA INTRODUCTION HUGO BOSS IN THE AMERICAS KEY AMERICAN MARKETS SUMMARY AND OUTLOOK HUGO BOSS Investor Day 2011 // Americas Strategy HUGO BOSS © November 8, 2011 24 / 33
Slide 25: Market specifics – USA
MARKET SPECIFICS – USA ■ Dynamic retail landscape ■ Rise of online, mobile, cross-channel shopping ■ Strong foothold of department stores ■ Growing private labels ■ Size and scale ■ High cost of doing business ■ Price sensitivity and discount ■ Promotions ■ Outlet specific business model HUGO BOSS I
Slide 26: Market specifics – USA
MARKET SPECIFICS – USA ■ Business concentrated around East and West coasts = 80% of volume NORTH WEST MID WEST 5% 13% NORTH EAST 36% SOUTH WEST 25% SOUTH EAST SOUTH 7% 14% HUGO BOSS Investor Day 2011 // Americas Strategy HUGO BOSS © November 8, 2011 26 / 33
Slide 27: Market specifics – USA: brand perception
MARKET SPECIFICS – USA HUGO BOSS brand perception* ■ US consumer extremely affordable luxury demanding and volatile consistent flattering ■ Representative HUGO BOSS something for everyone customer: cool reliable value ■ Male ■ Interested in European design clean durable ■ Looking for dressier models
Slide 28: Market specifics – Canada
MARKET SPECIFICS– Canada ■ Specific retail landscape ■ Consolidated dominant players in men’s business ■ Online still a small portion of sales ■ Retail space hard to find ■ Importance of cross-border shopping ■ Becoming the normal competitive environment ■ Customer tastes different to the US ■ More
Slide 29: Market specifics – Canada
MARKET SPECIFICS– Canada ■ Business concentrated in top three markets = 80% of volume VANCOUVER 10% MONTREAL 25% TORONTO 45% HUGO BOSS Investor Day 2011 // Americas Strategy HUGO BOSS © November 8, 2011 29 / 33
Slide 30: Market specifics – Central and Latin America
MARKET SPECIFICS – Central and Latin America ■ Retail landscape ■ Sophisticated landscape in key Latin American metropolis ■ Geographical and cultural diversity ■ Strong brand presence in major markets ■ Own retail in Mexico and Brazil ■ Franchise stores in secondary markets Sao Paulo Iguatemi re-op
Slide 31: Agenda: Summary and Outlook
AGENDA INTRODUCTION HUGO BOSS IN THE AMERICAS KEY AMERICAN MARKETS SUMMARY AND OUTLOOK HUGO BOSS Investor Day 2011 // Americas Strategy HUGO BOSS © November 8, 2011 31 / 33
Slide 32: Key success factors for future growth in the Americas
Key success factors for future growth in the Americas RETAIL WHOLESALE Expand own retail network into new Continue shop-in-shop roll-out markets Strengthen presence in points Leverage technology for cross-channel of sale integration Initiate concession business model Further improve in-s
Slide 33: HUGO BOSS
HUGO BOS S$