Hugo Boss is changing the seasons. The German luxury brand, famed for its men’s suits, will now be basing its designs around a four-season cycle, with monthly themes in between. Big news? Well, yes: we’re talking about the fashion world, where it is customary to launch two collections a year: spring/summer and fall/winter, which are usually premiered with much fanfare at the biannual fashion weeks in New York, London, Paris and Milan.
The seasonal shift by Hugo Boss is a move to be closer to the consumer rather than the calendar. It comes at the same time as a reduction in lead times – the period it takes an item of clothing to make it from initial sketch to being in store – as well as quicker integration of consumer feedback into the development of the next collection.
Today it takes the company 12 weeks to implement the lessons from the current collection into the new collection, where previously it may have taken up to two years. ‘Every season it is about getting the product right and hitting the consumers’ nerves,’ says Dennis Weber, head of IR at Hugo Boss, who regularly discusses these operational initiatives with investors.
Being on trend goes to the root of the fashion risk at a clothing label. Companies operate in an increasingly fast and fickle retail world, where quarterly sales can rise and fall depending on the latest designs sitting on the store shelves and – perhaps more importantly – featured in the style magazines.
‘Fashion by definition involves constant change,’ says Nils Vinge, an operations veteran turned head of IR at the Swedish mega-brand H&M. He lists the seasonal product makeover as his favourite part of the job. ‘The only thing we know about what we are selling today is that we won’t be able to sell that in a couple of months’ time,’ he adds. ‘Next year we will have a totally different collection, and this is an ongoing process.’
As Vinge suggests, the job of the IRO in the fashion industry involves keeping abreast of each season’s product line. At Hugo Boss, Dennis Weber regularly visits the showrooms, taking to brand directors and learning about the concepts and themes behind the new collections. The Mediterranean Sea, for instance, inspired the cuts and colours of this season’s Boss Orange.
Cinzia Oglio, head of IR at the luxury Italian shoemaker Tod’s, says investors want to know about current trends in the stores and the backlog of preorders for future collections. Investor days and site visits involve meeting the creative and brand directors as well as the CEO and CFO.
‘Creativity and innovation are key factors in the industry and ones difficult to measure,’ notes Chris Hollis, head of IR at French luxury group LVMH. Investors in LVMH want to meet everyone, he says, and the company puts on days where investors get to experience the passion of the people behind the brands. ‘It is also important to understand and educate investors about the manufacturing and retailing cycles of fashion brands.’
[Article by James Chambers, IR magazine]
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