Hugo Boss to reduce reliance on South-East Asia by shortening supply chain

Hugo Boss is expanding its production closer to its home base in Europe to lessen its dependence on South-East Asia.

The move comes as global supply chain issues have hampered the retail sector in tandem with the pandemic over the past 18 months.

The company’s chief executive Daniel Grieder is aiming to double the brand’s sales to €4bn a year by 2025 and told the Financial Times that supply chain disruptions were creating “unbelievable challenges” for Hugo Boss and its rivals, with supply shortages, delays and higher shipping costs.

As a result, Boss has expanded its factory in Izmir, Turkey and wants to hire a further 1,000 workers which would increase the number of staff by a third.

Grieder also touched on the future direction of the brand by saying that it promised to end years of “hibernation”, which had been induced under the previous ownership regime Permira, which had unsuccessfully tried to turn Boss from a premium to a luxury brand.

READ MORE: Lululemon warns of slowdown in athleisure sales amid Omircon variant

He told the Financial Times that he would expand the brand’s portfolio to offer its customers more casual and leisure wear.

Alongside its factory in Turkey, Boss also has sites in Germany, Poland and Italy, which account for 20% of its clothing production.

A further 30% of its garments are sourced from suppliers in or close to its base of Europe, with the company expecting this share to increase over the next few years.

“Our future strategy is to produce even more garments close to those markets where they will be sold,” Grieder said.

All items headed for the Americas will be produced in the company’s factory in Turkey, claiming the move would mark a “huge switch” for the company.

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