Annual Report 2021

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Brand power

For HUGO BOSS, the power of its brands – BOSS and HUGO – is a key prerequisite for the long-term success of the Company. Particularly in times of intense competition and constantly increasing customer expectations, strengthening the brands is becoming increasingly important. As part of its “CLAIM 5” growth strategy, HUGO BOSS aims at sustainably increasing brand power in the coming years, with the goal of significantly increasing the perception and relevance of BOSS and HUGO, especially among younger target groups. The increase in brand power is to be achieved primarily through the implementation of strategic initiatives to increase brand heat, brand health and brand value. Group Strategy

Highlights NEW Branding – Hailey Bieber (photo)

NEW Branding

Driving brand relevance is the top priority as part of “CLAIM 5”. We therefore implemented a new brand strategy to refresh BOSS and HUGO and launched two star‑studded global campaigns.

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At HUGO BOSS, brand power is systematically measured and evaluated by the central department Corporate Strategy, which reports directly to the Chief Executive Officer. The Managing Board is kept regularly informed of the progress made and results of the work.

Targets

HUGO BOSS has firmly anchored the strengthening of the brands in its “CLAIM 5” strategy. The Company has the ambition to be one of the top 100 global brands and is therefore striving to significantly increase the strength of BOSS and HUGO in the coming years.

Measures

As part of “CLAIM 5”, HUGO BOSS closely aligns all strategic initiatives with its customers and their needs. In line with the claim “Boost Brands”, the Company has started to refresh the global brand presence of BOSS and HUGO in 2021 in order to significantly increase the relevance of the brands. In order to strengthen the relevance of the brands, especially among younger target groups, and to realize their full potential, HUGO BOSS also intends to significantly expand its marketing activities in the coming years, with a focus on social media and exceptional collaborations. In 2021, for example, the Company celebrated the launch of the second BOSS x Russell Athletic collection as part of a combined offline/online event and was able to generate a high global reach thanks to extensive activation on social media. Under the claim “Product is King”, HUGO BOSS is pursuing the ambition of further strengthening its position in the important casualwear segment and establishing BOSS as a true 24/7 lifestyle brand. At the same time, HUGO is to serve as the first point of contact for younger consumers with trendy and commercial products. Enhancing the customer experience also plays a crucial role in strengthening the brands. As part of the claim “Rebalance Omnichannel”, both digital and physical consumer touchpoints are to be strengthened and turned into points of experience. In this context, a comprehensive relaunch of the Group’s own online flagship store hugoboss.com will take place in early 2022 in order to further enhance the digital customer journey and to enable customers to experience the new branding of BOSS and HUGO online as well. At the same time, the Company is planning to open a flagship store on Oxford Street in London in the first half of 2022 to significantly improve the shopping experience with a new store concept, especially in terms of emotionalization and digitalization. The new store concept was already implemented in first stores in Germany and the United Arab Emirates in 2021. Group Strategy

At HUGO BOSS, brand power is measured as part of a systematic evaluation in which both short and medium-term trends in brand heat and brand health are captured and analyzed, along with the long-term development of brand value. In order to assess brand heat and brand health, the Company continuously records the scope and tonality of the interactions of BOSS and HUGO on social media and in popular search engines. In addition, HUGO BOSS regularly conducts corresponding surveys among relevant target groups. The evaluation of brand value development is primarily based on the performance analysis of BOSS and HUGO in global competition, taking into account not only the impact of the brand on the customer, but also elements such as the financial outlook. In realizing the Company’s ambition of being one of the top 100 global brands, HUGO BOSS will work closely with the global brand consulting agency Interbrand in the coming years, focusing on the development of the Best Global Brand Ranking.

In addition to the instruments for measuring brand power, the Company’s internal customer experience management (CEM) is another important element in determining and improving customer satisfaction. This involves continuously recording direct customer feedback on the shopping experience and the BOSS and HUGO products. This feedback is continuously aggregated, evaluated and made available to the relevant decision-makers at the Company on a daily basis.

Performance indicators

When evaluating the data obtained by means of the CEM, the net promoter score (NPS) forms the most important key figure. The KPI measures the likelihood of a customer recommending BOSS and HUGO, consequently providing the Company with important insights in terms of brand health. Also in 2021, HUGO BOSS was able to further increase the NPS compared to the prior year. The Company aims at further improving this performance indicator in the future. Further information on the NPS can be found in the 2021 Sustainability Report.

In the coming years, the positioning of HUGO BOSS in the annual Interbrand ranking should also act as a clear indicator of the progress made in increasing brand power, particularly in terms of brand value.

Data protection

The aim of data protection is to guarantee the individual’s right to self-determination in terms of information. Due to the strong focus on the further digitalization of its business model, data protection is also steadily gaining in importance for HUGO BOSS. Customer data, in particular data from its own online business and the customer loyalty program, is highly relevant for the future success of HUGO BOSS. Equally important to HUGO BOSS is the proper handling of its employees’, business partners’ and shareholders’ data. Any breach of data protection laws represent an increased compliance risk. The Group aims to counter this risk using a system that complies with data protection laws and through appropriate technical and organizational measures. Risk Report, Material Organizational Risks

The central Data Protection Officer is responsible for data protection monitoring and compliance. The Company has also assigned responsible staff in the international Group companies. In addition, a centrally operated data protection unit was established. The purpose of this unit is to work closely with the Data Protection Officer and the data protection coordinators of key departments of HUGO BOSS AG in order to ensure personal data are processed in a legally compliant way. The work focuses on the continuous assistance for departments in data protection issues, early identification of risks, remediation of weaknesses, and employee education. Any contraventions must be reported to the Data Protection Officer. The Managing Board is kept updated on the progress of work via regular data protection reports.

Targets

HUGO BOSS aims to completely rule out any contraventions of applicable data protection laws as far as possible.

Measures

Group employees are educated about data protection issues by means of general and activity-related training courses as well as regular documentation of digital confidentiality obligations. For example, all employees with access to a computer must regularly complete a comprehensive e‑learning program on data protection. This is intended to continuously increase awareness of the handling of personal data, particularly in light of the provisions of the EU General Data Protection Regulation. The Company has additionally developed an internal data protection policy as well as other data protection guidelines, to guarantee the comprehensive rights of affected persons, in particular. The guidelines are regularly reviewed to ensure they are up to date in terms of the applicable data protection provisions, and constantly further developed.

All internal processes and systems for processing personal data are measured on an ongoing basis and further developed to ensure that they comply with the legal data protection guidelines. The improvements are aimed at preventing data misuse and theft. There are extensive data protection provisions for the Company’s online presence and mobile apps. When legal violations have been discovered, the Company has implemented contingency plans to initiate countermeasures.

Performance indicators

In 2021, as in the prior year, the Company was not aware of any violations in the sense of data protection infringements established by authorities or courts.