Hugo Boss Ag · XETR:BOSS
Hugo Boss — Investor Day (November 2013)
34 slides from Hugo Boss's investor day presentation, Nov 26, 2013
Slide 1: HUGO BOSS
HUGO BOSS
Slide 2: HUGO BOSS Investor Day 2013 China Strategy
HUGO BOSS Investor Day 2013 China Strategy Mr. Gareth Incledon, Managing Director China Hong Kong, November 26, 2013 Investor Day 2013 // China Strategy HUGO BOSS © November 26, 2013 2 / 34
Slide 3: Agenda
Agenda HUGO BOSS in China Key market influences Key strategies and initiatives Summary Investor Day 2013 // China Strategy HUGO BOSS © November 26, 2013 3 / 34
Slide 4: Agenda: HUGO BOSS in China
Agenda HUGO BOSS in China Key market influences Key strategies and initiatives Summary Investor Day 2013 // China Strategy HUGO BOSS © November 26, 2013 4 / 34
Slide 5: HUGO BOSS in China
HUGO BOSS in China Overview (as of FY 2012) 50 DOS 147 47 JV 50 WHS DOWNTOWN / FULL-PRICE >1,200 40 EMPLOYEES CITIES 11 PREMIUM OUTLET 13 13 WHS TRAVEL RETAIL 20 >90% YEARS OF OPERATION BRAND AWARENESS 1 Launched February, 2013 E-COMMERCE Investor Day 2013 // China Strategy HUGO BOSS © November 26,
Slide 6: Strong organization and extensive control of distribution
HUGO BOSS in China HUGO BOSS has established a strong organization and has taken extensive control of distribution ■ Major franchise takeovers executed between Driving toward retail 2010 and 2012 Greater China wholesale / retail sales split ■ Building a strong local organization 12% ■ Increased mark
Slide 7: Agenda: Key market influences
Agenda HUGO BOSS in China Key market influences Key strategies and initiatives Summary Investor Day 2013 // China Strategy HUGO BOSS © November 26, 2013 7 / 34
Slide 8: Key market influences: government policy uncertainty
Key market influences Uncertainty of government policy continues to affect consumers in our target market ■ Anti-corruption laws raise uncertainty about gift-giving and ongoing luxury sentiment ? ? ? ■ Housing restrictions impact consumer Luxury & consumer taxes sentiment and discretional spending ?
Slide 9: Wealthy travellers shift demand from domestic to global
Key market influences Wealthy travellers shift demand from domestic to global level ■ Growth in Chinese consumption of global China outbound tourism (travellers in million) 148 luxury ■ Double digit growth in outbound travel from 105 2009 to 2013 48 ■ Demand from Chinese consumers has become an incr
Slide 10: Floor space proliferation brings opportunities and challenges
Key market influences Floor space proliferation brings opportunities and challenges ■ Vast increases in floor space through Annual mid- to high-end retail space addition (‘000s sqm in Beijing, Chengdu, Shanghai & Tianjin) new developments provide robust + 55% expansion opportunities ■ Rapid prolifer
Slide 11: Competitive landscape sees increased depth and spread
Key market influences Competitive landscape sees increased depth and spread ■ Increased competition expressed in Competitive landscape (breadth & depth of competition) wide variety of ways: ■ New entrants increase competition in Tier 1 Tier 1 / Tier 2 / Tier 3 / Tier 4 Number of competitors and Tier
Slide 12: Agenda: Key strategies and initiatives
Agenda HUGO BOSS in China Key market influences Key strategies and initiatives Summary Investor Day 2013 // China Strategy HUGO BOSS © November 26, 2013 12 / 34
Slide 13: Key strategies and initiatives
Key strategies and initiatives STRENGTHENING ■ Multi-channel marketing ■ Store excellence OUR BRANDS ■ Outdoor advertising focus ■ Merchandise strategy BUILDING ■ CRM and retail marketing RETAIL EXCELLENCE ■ Training and customer service EXPANDING AND UPGRADING ■ Distribution strategy DISTRIBUTION I
Slide 14: Key strategies and initiatives
Key strategies and initiatives STRENGTHENING ■ Multi-channel marketing ■ Store excellence OUR BRANDS ■ Outdoor advertising focus ■ Merchandise strategy BUILDING ■ CRM and retail marketing RETAIL EXCELLENCE ■ Training and customer service EXPANDING AND UPGRADING ■ Distribution strategy DISTRIBUTION I
Slide 15: Multi-channel marketing
Multi-channel marketing Events in focus: Shanghai fashion show (2013) and Beijing fashion show (2012) ■ Events held in iconic locations, with powerful combinations of local heritage and European style Investor Day 2013 // China Strategy HUGO BOSS © November 26, 2013 15 / 34
Slide 16: Multi-channel marketing
Multi-channel marketing Events in focus: Shanghai fashion show (2013) and Beijing fashion show (2012) ■ Highly successful multi-channel marketing campaign, generating up to EUR 11.5 million in editorial value in a single year Investor Day 2013 // China Strategy HUGO BOSS © November 26, 2013 16 / 34
Slide 17: Multi-channel marketing
Multi-channel marketing Shanghai, 2013 Events in focus: Shanghai fashion show (2013) and Beijing fashion show (2012) Beijing, 2012 Live stream views Online visits ‘On demand’ views + 48% + 316% + 193% Sina Weibo fan attraction Mobile visits Movie views + 93% + 234% 2,014,189 + Investor Day 2013 // C
Slide 18: Multi-channel marketing: Shanghai fashion show
Multi-channel marketing Event in focus: Shanghai fashion show (2013) ■ Shanghai fashion show had a global impact, with brand interest reaching key fashion markets 5% 6% 16% 3% Top country 3% views for live 3% 38% 17% stream of 4% fashion show 4% 35% % total 4% Others Australia Others Canada Greater
Slide 19: Outdoor advertising focus
Outdoor advertising focus Outdoor advertising maximizes consumer awareness and drives new consumers to store ■ Outdoor advertising is highly relevant in China ■ Maximizes brand exposure ■ Reinforces brand strength ■ Highlights breadth of product offer ■ Exposure to audiences beyond current consumer
Slide 20: Store excellence
Store excellence Store development ensures consistent brand experience, across all touch points Flagships Premium Outlets A-City Investor Day 2013 // China Strategy B-City HUGO BOSS © November 26, 2013 20 / 34
Slide 21: Store renovations strengthen brand equity
Store excellence Store renovations strengthen brand equity and enhance the retail experience ■ Extensive renovation activity in 2012 Store renovation status (time since opening / last renovation of stores in China) and 2013 expected to continue in 2014 ■ Renovated store network ensures consistent br
Slide 22: Merchandise strategy: menswear
Merchandise strategy Development of menswear business underpins current and future success ■ Strength of Sportswear offering a key asset in BOSS menswear split, China a historically casualwear-driven market (% sportswear vs. clothing and dress furnishings, FY12) ■ Formalwear relevance is developing
Slide 23: Merchandise strategy: womenswear
Merchandise strategy Womenswear completes the world of HUGO BOSS Luxury goods market by gender Women’s ■ Women’s apparel focus and approach to dress (% total spend, EUR billion) Men’s is undergoing rapid change, and women have 10% increasing: 50% ■ Influence, domestic and professional 90% 75% 65% ■
Slide 24: Merchandise strategy: shoes and accessories
Merchandise strategy Shoes and accessories to become synonymous with HUGO BOSS quality ■ Shoes and accessories are one of the fastest Global luxury accessories growth (in EUR billion) Shoes growing categories market-wide Leather ■ Shoes and accessories address various + 13% + 4% consumer segments an
Slide 25: Key strategies and initiatives
Key strategies and initiatives STRENGTHENING ■ Multi-channel marketing ■ Store excellence OUR BRANDS ■ Outdoor advertising focus ■ Merchandise strategy BUILDING ■ CRM and retail marketing RETAIL EXCELLENCE ■ Training and customer service EXPANDING AND UPGRADING ■ Distribution strategy DISTRIBUTION I
Slide 26: CRM and retail marketing
CRM and retail marketing CRM and retail marketing initiatives engage consumers on an intimate level strengthening brand awareness and loyalty ■ Loyal customers are core net sales driver ■ Active customers generate >75% of total net sales ■ Active customers spend >10% more per transaction ■ CRM and r
Slide 27: Training and customer service
Training and customer service Retail training strongly improves customer service levels ■ Training is a core component of our world- Training hours class global customer service excellence (# hours in Greater China (Business Partner & DOS)) ■ Superior service levels are an important +32% competitive
Slide 28: Key strategies and initiatives
Key strategies and initiatives STRENGTHENING ■ Multi-channel marketing ■ Store excellence OUR BRANDS ■ Outdoor advertising focus ■ Merchandise strategy BUILDING ■ CRM and retail marketing RETAIL EXCELLENCE ■ Training and customer service EXPANDING AND UPGRADING ■ Distribution strategy DISTRIBUTION I
Slide 29: Distribution strategy: key customer groups
Distribution strategy Brand distribution geared to effectively address key customer groups ■ Three key core target customer groups: Key associations with HUGO BOSS ■ Sophisticated Luxurious Respectable ■ 30-45 years old ■ ~100,000-190,000 USD annual income Fashionable Upper-class Tasteful Successful
Slide 30: Exploiting the value of growth cities
Distribution strategy Exploiting the value of growth cities ■ “Quality beats quantity” approach Middle class representation by tier (% share of total middle class by type of city) ■ Focus on upgrade of brand representation in Tier 1 and Tier 2 cities 16% Tier 1 40% 40% Tier 2 ■ Future development fo
Slide 31: E-commerce and travel retail opportunities
Distribution strategy E-commerce and travel retail opportunities complement core business development ■ Online channel provides wide 576 E-commerce market size ($USD billion) development opportunities ■ HUGO BOSS China online store China USA 327 launched in February 2013 ■ Travel retail becoming an
Slide 32: Agenda: Summary
Agenda HUGO BOSS in China Key market influences Key strategies and initiatives Summary Investor Day 2013 // China Strategy HUGO BOSS © November 26, 2013 32 / 34
Slide 33: Summary
Summary ■ Rapidly changing market environment has put a strain on the Group’s catch-up in the market ■ Clear strategy in place to capitalize on strongly growing target consumer group: ■ Upgrade retail presence and service levels to elevate consumer experience ■ Strengthened marketing and CRM initiat
Slide 34: HUGO BOSS
HUGO BOSS