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Mark Brashear, Hugo Boss’ chairman and chief executive officer of the Americas, has an ambitious five-year plan with the goal of doubling the company’s volume in the U.S.
“Challenging times often force us to learn the most valuable lessons, and we are no exceptions to that,” Brashear said, sitting in his modern office at the Hugo Boss headquarters and showroom at the Starrett-Lehigh Building in Manhattan. “Certainly since last fall, when the macroeconomic climate became more challenging, we, too, have faced a lot of challenges.
“In response to that, we have looked deep and hard at our organization,” said Brashear, who arrived at Boss in January. “We have had realignments and consolidations, where we could manage areas while trying to refrain from touching the end-consumer, and really trying to focus on operational areas where we need to be more efficient.”
Brashear came to Boss from a noteworthy fashion and retail background. He was president of Façonnable from November 2001 to April 2008 and executive vice president at Nordstrom Inc., which owned Façonnable at the time. Before that, he was executive vice president and general manager of Nordstrom’s Southwest Business Unit, rising to the post after starting his Nordstrom career as a salesman in the men’s sportswear department at the Palo Alto, Calif., store.
At Hugo Boss, he is being charged with developing the business, specifically the sales and profitability for the Americas region, as well as responsibility over areas such as marketing, finance, local production, distribution, information technology and merchandising.
Brashear’s long-term goals will benefit from a renewed strategy under global chairman and ceo Claus-Dietrich Lahrs, who is taking a more market-specific approach, improving the supply chain and speed-to-market, and crystallizing the DNA of each sub brand, from the Boss Black line through the Boss Selection line, Boss Orange, Boss Green and the more avant-garde Hugo lines.
“The biggest opportunity I identified initially is that we needed to be closer to our customer,” Brashear said. “As part of a European global business, evolving at a pace and keeping up with our customer is critical to succeed. We have put in place means that will allow us to be closer to the consumer.
“The points of sale and every interaction customers have with our brands is our key priority, whether it is our wholesale channel where we will really focus on improving the executions, or in-store shop-in-shop development to make a stronger statement for Hugo Boss, and clarifying the respective brands within our portfolio,” he added.
As part of the plan, the company beefed up its merchandising staff, which will spend more time in stores to ensure a good presentation at the retail level. This included the hiring of vice president of merchandising for the Americas, Matthew Corin, last May. In the new role, Corin works with the Metzingen, Germany, base to secure the right design, fit and quality for the local markets.
In addition, the company expanded Ward Simmons’ role to senior director of public relations and marketing.
“We had some key positions eliminated to ensure that we are right size for the business climate that we faced,” Brashear said. “When you do those difficult moves directly, you are in a better position when times improve.”
Meanwhile, the company is in talks with several key retail partners to upgrade and enhance existing shop-in-shops, and add new ones, though Brashear wouldn’t elaborate on details.
In the U.S., the Hugo Boss business is divided into 60 percent wholesale and 40 percent retail. There are a total of 69 Hugo Boss stores: 35 company-owned retail stores, 12 franchised units and 22 off-price factory outlets. According to Brashear, non licensed categories such as apparel, footwear and accessories are sold in over 800 points of sale.
For the 2008 fiscal year, Hugo Boss AG reported that net income fell 27 percent to 112 million euros or $164.8 million, while sales rose 3 percent to 1.69 billion euros, or $2.48 billion. The Americas region represents about 18 percent of global sales.
Among the plans is a renewed focus on growing the company-owned retail component of our brand. “We want to definitely maintain and enhance the existing business relationships at the wholesale channel,” Brashear said. “At the same time, we want to complement that distribution with a stronger owned retail presence.”
Last week, the company opened a 3,700-square-foot unit at the Topanga Shopping Center in Canoga Park, Calif. On Thursday, the company added a 3,300-square-foot unit at Bellevue Square in Bellevue, Wash. A 3,800-square-foot unit at Roosevelt Field in Garden City, N.Y., will be unveiled July 31.
In the first quarter of 2010, the company also plans to add e-commerce to its Web site, hugoboss.com.
“It will be a very nice addition to our portfolio,” Brashear said. “We strive for hugoboss.com to represent our single largest point of sale within the U.S.”
In terms of products, the footwear category and the Boss Green line, which offers active inspired sportswear for men with a European sensibility and styling and a fashionable color palette, present particular opportunities for growth in the U.S.
“We also see key opportunities in both broader category penetration,” Brashear added. “We see specific areas like Boss [Black] women’s as a significant growth opportunity for the brand. As for specific categories in men’s wear, we focused on Boss Black. We see a tremendous opportunity of executing that better, being faster with the speed to market, ensuring that we have a range of product that is geographically appropriate, such as in the Southern parts of the U.S., which means more warm-weather collections.”
As for women’s, Brashear conceded the company continues to be primarily known for its men’s wear, which accounts for 80 percent of the total business.
“To complement that and to be better known for competencies in women’s wear, we are focusing on areas that we think the female Hugo Boss target consumer will appreciate,” Brashear said. “That includes the wear-to-work component for suiting-based collections. We believe our expertise in those collections will translate well, and we believe that our positioning in terms of style, price value and fit should position this collection to gain market share in a very competitive field in the U.S.”
He envisions women’s apparel as eventually accounting for 30 to 40 percent of the total Hugo Boss business in the U.S.
Women’s suiting has been a particular bright spot in recent months, and Brashear hopes to capitalize on the momentum.
“We have really identified a niche of business where our brand expertise seems to resonate well with this woman who has a style aesthetic, who is confident, who looks for chic suiting that is European, with structured garments that are also feminine,” he said, adding the business has recently been growing in the “upper double digits.”
“We are working to do some key events and looking to market it effectively with either spokespersons wearing the product, endorsements, and key partnerships to enhance the visibility for Boss women’s, because we recognize that as an opportunity,” Brashear said.