Hugo Boss Research Paper
Hugo Boss is a luxury product company and its core business is in the sales of high-end design clothing. However, it also sells royalties such as its colognes, watches and other merchandise to increase profits. Its strategy to drive growth would be to be more customer-oriented and to have a quick response to sales in the market. Some of its competitors would be the high-end companies such as Burberry and Armani. Its main target audience is the higher income men. With a Compound Annual Growth Rate (CAGR) of around 10.11% in the past 6 years, it can be concluded that Hugo Boss is doing well even though there was a financial crisis and that it is a company worth investing in. Hugo Boss was founded in 1924 by Hugo Boss himself.
With 100 years of history, it is safe to say that Hugo Boss is an old company. Its headquarters is currently set in Metzingen, Germany, showing that it is European-oriented but it also has markets all over the world. It is also a big company as it has 9027 employees and in 2010 it made a €1.7 billion in revenue and €206.4 million in profits. However, in comparison with the biggest company in the industry, Louis Vutton Moët Hennessy (LVMH), Hugo Boss is only 3/20 times of LVMH.
From Figure 1.1, you can see that the main growth of Hugo Boss comes from income growth. As you can see, with a CAGR of around 11.4% in net income growth, it shows that Hugo Boss has demonstrated strength in an extremely difficult market environment. However, with a drop of 4% in CAGR in PE ratio, it may indicate that the investors are not confident in investing in the luxury market.
Investors might have this mindset due to the recession. With a 1.4% CAGR in cash flow contribution, it shows that Hugo Boss has increased its annual dividends and it is benefiting the investors. Therefore, it can be concluded that Hugo Boss has created significant value for its shareholders.
From these graphs, it can be concluded that Hugo Boss is earning more profits
With 100 years of history, it is safe to say that Hugo Boss is an old company. Its headquarters is currently set in Metzingen, Germany, showing that it is European-oriented but it also has markets all over the world. It is also a big company as it has 9027 employees and in 2010 it made a €1.7 billion in revenue and €206.4 million in profits. However, in comparison with the biggest company in the industry, Louis Vutton Moët Hennessy (LVMH), Hugo Boss is only 3/20 times of LVMH.
From Figure 1.1, you can see that the main growth of Hugo Boss comes from income growth. As you can see, with a CAGR of around 11.4% in net income growth, it shows that Hugo Boss has demonstrated strength in an extremely difficult market environment. However, with a drop of 4% in CAGR in PE ratio, it may indicate that the investors are not confident in investing in the luxury market.
Investors might have this mindset due to the recession. With a 1.4% CAGR in cash flow contribution, it shows that Hugo Boss has increased its annual dividends and it is benefiting the investors. Therefore, it can be concluded that Hugo Boss has created significant value for its shareholders.
From these graphs, it can be concluded that Hugo Boss is earning more profits