Product is the key to success

HUGO BOSS is a world-renowned world-class brand. At present, the company has BOSS black mark, BOSS orange mark, BOSS green mark, BOSS selection and HUGO top five brands, covering men and women clothing (including formal wear, casual wear, sportswear), footwear, leather goods, perfume, watches, glasses and Other Accessories.

From 1990 to 2010, the average annual growth rate of sales revenue and net profit of the company was 6.72% and 13.81% respectively. The company's stock price rose nearly 16 times during the same period, far higher than the 2.7 times increase of the German DAX index over the same period.

In the history of the company, it has experienced four choices of fate choices. For the first time, he chose to transform from uniforms and work clothes to men's fashion. He successfully transformed himself into the largest menswear manufacturer in Germany in the late 1980s, ranking among the top international fashion brands. The second time, we chose brand diversification and global expansion, successfully reversed the decline in performance in the early 1990s, and brought the company back to the high growth track. For the third time, she chose to actively develop the women's apparel business and at the same time accelerate the expansion of direct marketing channels, enabling the company to smoothly weather the economic downturn in 2002 and 2003, and from 2004 on, sustained rapid growth in income and net profit. For the fourth time, we chose to insist on an uncompromising price strategy during the financial crisis, which further strengthened the company's high-end brand image and succeeded in ushering in a substantial rebound in performance after the financial crisis.

We believe that the mystery of the company's twists and turns but steadily grows mainly comes from three aspects: (1) Brand building: Through multi-brand and multi-category strategies to obtain more development opportunities, stick to the high quality of products and high brand positioning, and pay attention to continuous in-depth brand marketing. (2) Expansion of channels: Through the construction of directly-operated stores, both the gross profit margin and the brand will be promoted, and a broader space for development will be achieved through the expansion of globalization. (3) Operational strategy: The implementation of the “Columbus Plan” will improve the efficiency of the supply chain in an all-round manner, and the brand licensing will be enhanced and improved to enhance the overall competitiveness of the company.

We believe that the successful experience of HUGO BOSS on domestic men's apparel brand mainly includes the following aspects: (1) The first prerequisite for sustainable brand development is to adapt to changing social consumption trends. (2) Product quality is one of the key factors in the competition of high-end men's wear ( 3) The key to the development of women's clothing brands to women's clothing:

Full preparation + constant correction + high brand investment + perseverance (4) Appropriate direct management is of strategic importance for the long-term development of high-end men's wear.

Conclusion: From the current development status of local branded apparel companies, especially listed companies, there is currently no company that has a complete analogy with HUGO BOSS, but there are already some A-share companies that use it as a model for learning in corporate operations, such as the Annunciation and Nine animal husbandry. Although HUGO BOSS Company is not the most outstanding one in our series of research reports in terms of company size, profitability, etc., but its rigorous and pragmatic management style - the consistent high demand for product quality and branding for our local brand companies. It is worth learning. We believe that the local men's clothing companies have also reached a stage where they have obtained extensive growth from the initial reliance on alliances or agents to refine their operations on brands, products, and channels. Only in this way can new breakthroughs be achieved. We recommend to pay attention to related companies such as Septwolves (Buy), Jiu Mu Wang (Unrated) and Annunciation (Overweight).