Global sourcing and distribution activities

HUGO BOSS works with independent suppliers, mostly in Eastern Europe and Asia, to cover its sourcing requirements. In addition, the Group sources around 20% of its procurement volume internally. The collections are marketed in 125 countries around the world, with Europe as the largest market, accounting for 60% of sales, followed by the Americas (24% of sales) and Asia/Pacific (14% of sales). In addition, 2% of sales are generated from licenses. Sourcing and Production Sales and Profit Development of the Business Segments

Group’s own retail business is the most important sales channel

Over the past few years, HUGO BOSS has expanded the network of its own retail stores significantly. In fact, 60% of the Group’s sales were generated in this channel in 2015, as a result of a net increase of 72 points of sale owned by the Group to make a total of 1,113 around the world. These include freestanding stores in exclusive retail locations, shop-in-shops operated by the Group in department stores and factory outlets. The e-commerce business also grew in importance in 2015, with customers from a total of 11 countries – Germany, Great Britain, France, Spain, Italy, the Netherlands, Belgium, Austria, Switzerland, the US and China – now able to order articles via the online store. Further expanding this sales channel and linking it to the bricks-and-mortar retail stores was one of the Group’s most important projects in 2015, and should enable HUGO BOSS to offer its customers an even more convenient shopping experience in the future. The wholesale business contributed 38% to Group sales in fiscal year 2015. Wholesale partners include department stores, specialist retailers, which are frequently family-run, franchisees and, to a lesser extent, specialist online retailers. Department stores and specialist retailers sell HUGO BOSS products either in separate shop-in-shops or in a multibrand environment. Franchise partners operate freestanding HUGO BOSS stores in accordance with the Group’s specifications and operate mainly in small markets not addressed by the Group’s own retail business. HUGO BOSS products can be bought at around 6,450 wholesale points of sale. Group Strategy General Economic Situation and Industry Development