Expertise safeguarded through internal sourcing of key product groups
In addition to the high quality which customers around the world expect of the materials and craftsmanship of HUGO BOSS products, the timely availability of merchandise on the shop floor gives the Group a decisive competitive edge. As a company with international production activities and business operations, HUGO BOSS crucially relies on smooth-running, standardized and system-enabled sourcing and production processes. In terms of value, 20% of total sourcing volumes were produced by the Group’s own facilities last year (2014: 20%). They cover a significant part of its classic tailored menswear and womenswear ranges, enabling the Group to safeguard and continuously build on crucial expertise, further develop quality standards and optimize merchandise availability. The remaining 80% of the total value of procurement in 2015 comprised products manufactured by independent contract suppliers or sourced as merchandise (2014: 80%).
The Group’s own production plants are located in Izmir (Turkey), the Group’s largest facility with 3,942 employees in 2015 (2014: 3,613), Metzingen (Germany), Radom (Poland) and Morrovalle (Italy). Production activities in Izmir primarily concentrate on the classic tailored range, which constitutes the Group’s core competence. In the menswear segment, this chiefly comprises very high-quality articles such as coats, suits, jackets and shirts. Likewise, all womenswear product groups are produced in Izmir. The Metzingen site is used as both a development and a production facility. Located on the campus of the HUGO BOSS headquarters, the Technical Center primarily produces suits, jackets and trousers in small series in addition to prototypes, samples and individual orders. In particular, HUGO BOSS tailors its Made to Measure suits in Metzingen. The Radom and Morrovalle facilities mainly produce shoes.
The plant in Cleveland (USA), which previously mostly produced suits for the American market, was sold to another apparel manufacturer in the first half of 2015 on the basis of a detailed site analysis. This also included the transfer of all employees. Cleveland’s production volume was relocated to the Group’s own production facilities and existing Group suppliers. Consequently, the Group’s sourcing activities are now concentrated on a smaller number of larger facilities. At the same time, it is able to secure important production expertise. In this context, capacity at the Group’s own facility in Turkey was expanded by the construction of a new production hall, with additional employees recruited accordingly.