Hugo Boss to Drop Prices of Hugo to Go After Younger Shoppers
German luxury fashion house Hugo Boss is making big changes in order to turn its books back to black by 2018.
Its key drivers include narrowing its focus to just two lines—including one at a lower price point to appeal to younger consumers—and making a big push toward digital.
Hugo Boss’s managing board set out its plan to return to profitability during an investors day in London on Wednesday. CEO Mark Langer—who was was appointed to the role in May, after formerly serving as the company’s finance chief—said that maintaining a slimmer brand portfolio, making its prices the same worldwide, and closing stores, particularly in the U.S., are all part Hugo Boss’s plan to bounce back from slipping sales in 2016. The company’s sales slipped by two percent this year, and it expects its earnings to fall an additional 17 and 23 percent this year.
Realigning the brand’s portfolio is at the top of the to-do list. Currently, Hugo Boss has four brands, but who they target and where they fit in the retail market is hard to define, according to the company’s statement. “The complexity of our brand portfolio has led to confusion among our customers,” chief brand officer Ingo Wilts said in his presentation. To fix that, the company will fold its Boss Orange and Boss Green lines into its core Boss brand.
Boss will target a higher-spending customer, with a focus on business wear and high-end casual clothing. It will compete with other luxury brands including Burberry, Prada and Armani. Hugo, on the other hand, will be aimed toward a younger consumer, and it will be priced at about 30 percent lower than the Boss line in order to compete with lower-priced luxury brands such as Rag & Bone and The Kooples. “We have placed too strong a focus on a push into luxury price points,” Langer said about the shift.
Returning focus to its core customer—men—and not continuing down the path of trying to cement a high-luxury name for itself should pay off, according to Chris Paradysz, the founder and CEO of PMX Agency. “While the Hugo Boss brand has been off in luxury land and busy positioning itself as a luxury brand for women, it hasn’t been keeping up with where the demand is,” he said. Men are after more than just a traditional suit—they are wanting to incorporate more casual fabrics and pieces, like denim and footwear, into their everyday wardrobes.
Read the full article here in Glossy.