Intro
Expanding the complimentary footwear category by aligning the product roadmap to the business roadmap
Hugo Boss is a globally dominant fashion and lifestyle brand, primarily known for their beautifully crafted suits, shirts and ties. While the tailored clothing business was growing, the footwear business was underperforming and was in a state of revenue decline before I joined the company. The footwear category lacked focus and did not have a basics business developed. By working directly with the design team in Europe we were able to align the business roadmap to the product roadmap. First, we developed a complimentary dress shoe business that supported the tailored clothing business that was grounded in replenishment basic styles and grew this to 60% of the business at 48% gross margins. Secondly, we developed and merchandised a fashion-forward sneaker and dress-casual collection that complimented the sportswear business.
scaling a globally dominant brand
Creating A Category Killer
Challenge
Lifestyle brands are product categories rolled up into a collection. The goal of any lifestyle brand is to dress their customers head-to-toe but that is rarely the reality of consumer behavior. Fashion consumers want to buy the best products from the best brands, which are often known as “category killers” (e.g. Hugo Boss suits or Calvin Klein underwear). The main challenge that was uncovered was the price parity of footwear did not align with the pricing structure of the suits. An average Hugo Boss suit sold for $795 MSRP but the average Hugo Boss dress shoe sold for $250 MSRP. Upon analyzing the market, similar European lifestyle men’s brands had a suit-to-shoe pricing ratio of roughly 4:1, therefore, Hugo Boss dress shoes were overpriced compared to customer expectations.
Solution
The focus was clearly on the dress shoe category since the Hugo Boss brand dominated in the tailored clothing market so we had to get this right first with clarity. We repositioned our entry price basic dress shoe collection at $195 MSRP to align with our suit price points at $795 (4:1 ratio) and the customer immediately responded to the product driving meaningful sell-throughs. While the footwear business complemented the much larger clothing business, the category was merchandised to stand on its own as a full footwear collection with dress shoes, casual shoes, and fashion sneakers with a good-better-best pricing architecture. I led the resurgence of the business and Hugo Boss footwear became a top 10 footwear brand at all Nordstrom, Bloomingdale’s, Saks 5th Avenue stores and select Macy’s stores. As a result, Hugo Boss dress shoes indeed achieved “category killer” status.
Sales Increase
2X
3-yr CAGR
32.24%
DRESS SHOE RANKING
#4
EBITDA
+16%
It is a pleasure working with a competent and business driven professional, who knows his market and customers needs like he knows his product, which is not always a given. Over the years we have been able to implement ambitious growth plans in a tough market place and shift strategies to meet new demanding goals, always with a positive attitude and building bridges.
I am privileged to have met and to account Jeremiah to my close friend, he is a serious and trustworthy person which I like to work with and spend time together.