Hugo Boss looks beyond the pandemic

Luxury fashion brand Hugo Boss has officially launched its e-commerce platform into Australia this week as part of its digital expansion into Asia-Pacific.

The online network has just expanded to 22 new countries, where customers can now shop and order items for delivery. The rollout will extend to Canada, India and Mexico later this year.

Even during the test phase of the new local site and without promotion, it has experienced some positive feedback from customers, noted Matthew Keighran, managing director of SEAPAC at Hugo Boss.

“We’re getting a lot of great interaction from our customers, and the speed from warehouse to the consumer is really much quicker than I thought – it’s within a week, even though deliveries are coming from Europe in a rather restricted transport scenario. It’s been really good,” Keighran told Inside Retail.

“The next step is to assess and see what people are buying from what regions. As we go forward with the official launch, we’ll have more insight into that. It’s been a long time coming. Eventually we’d like to localise the site a bit more. Obviously, our seasons are a little different, but as product and fashion is moving into a trans-seasonal scenario, there will be something for everyone.”

In the coming years, Europe and the Asia-Pacific region will continue to be the focal points for a further expansion of Hugo Boss’s concession model.

While Hugo Boss is well-known for its impeccably tailored suits, lately, the brand has seen a rise in its business casual category, featuring knits, chinos, unstructured jackets and trousers, which has offset the drop in sales around suits, said Keighran. Consumers will continue to buy suits, but given the changing lifestyle of office workers, they will be viewed as an option for special occasions rather than a mandatory part of the work wardrobe.

Menswear brands have struggled in the Australian market in recent years and last week, TM Lewin went into voluntary administration.

“We’re never going to be known as a tracksuit pant creator, but you need to have things to deliver at the right time. Business shirts will come back one day, but businesses have to be agile and not locked into one thing or another in this very uncertain time,” explained Keighran.

“Anyone that is in the business of just selling suits would be in a difficult position right now.”

Working towards fairer rent

Hugo Boss’ physical store network is back up and running and the business has been in discussions with landlords recently in the hope of negotiating rental agreements. For the most part, landlords have been understanding and helpful, said Keighran, although there is one in particular that has been “so incredibly uncooperative and short-sighted”.  

“All businesses have faced virtually no revenue. I see us working in tandem [with landlords] to find a fair and reasonable solution. It can’t be all the tenant’s problem. The landlord has to take some of that on. If there’s no mid- to long-term strategy here, then I think a lot of tenants will be looking elsewhere,” he said.

“It’s not possible for people to defer rental payments during closure. It’s not feasible for anyone to defer payments and pay it one day, whenever we come out of this – it’s not going back to an amazing situation. I think a lot of retailers will look at consolidations of their networks and ask themselves how many physical spaces are necessary. I’m a believer in bricks-and-mortar but it has to make sense. It can’t all be the landlord’s win and not the tenant’s.”

Ideally, Keighran would like to see landlords agree to offer rental payments based on a percentage of sales. If that’s not possible, he thinks a fair alternative would be to come to an agreement where the drop in traffic is taken into account.

“At the end of the day, we’re paying rent for traffic,” he said.

“There will be malls full of empty stores unless we come to some kind of agreement.”