Hugo Boss will target emerging markets and upgrade its core brand to boost sales and margins

Hugo Boss will target emerging markets and upgrade its core brand to boost sales and margins

German fashion group Hugo Boss has set out plans to accelerate sales growth and boost margins by targeting emerging markets and upgrading its core brand.

Ahead of its investor day in Paris today (19 November), the German fashion house said it will strive to achieve high-single digit sales growth and a 25% increase in operating margin between now and 2020.

To achieve these goals, the fashion group will upgrade its Boss core brand, with the aim of gaining a 20% share of sales in the luxury segment. The aim is to see the label sold mainly in a mono-brand environment, primarily through the group's own stores.

The company also sees "considerable" potential in women's wear, expecting the segment to account for at least 15% of its sales by 2020. Driven by further product initiatives for apparel, shoes and accessories, women's wear is forecast to grow at double-digit annual rates over the next few years.

Hugo Boss expects the contribution made to sales from its own retail business to increase to at least 75% by 2020. In addition, it intends to extend its store network by taking over further franchise activities and shop-in-shops from wholesale partners, as well as integrate its online and in-store activities.

Geographically, the group will focus on markets such as Asia, Eastern Europe and the Middle East, and aim to generate "solid" sales growth in its core European markets.

"Considerable sales and profit increases underline the success of our strategy in the last years," said CEO Claus-Dietrich Lahrs.

"The initiatives introduced today develop this strategy further and secure profitable growth. We will elevate our core brand in both menswear and women's wear. In doing so, we offer customers an attractive brand experience across all touch points."

Earlier this month Hugo Boss warned that full-year sales and profits will fall short of expectations as trading falters in Europe and Asia. The company, which said business was impacted during last few weeks of trading, booked a 2% rise in third-quarter net profit to EUR115m as sales rose 9% to EUR717m.