Business activities and Group structure

• Positioning in the premium segment of the global apparel market
• Strategic focus on increasing the desirability of BOSS and HUGO
• Distribution via own retail and wholesale – online and brick-and-mortar

Business activity

As a global fashion and lifestyle company positioned in the premium segment, HUGO BOSS is one of the leaders in offering high-quality women’s and men’s apparel. The collections of its brands, BOSS and HUGO, offer customers a comprehensive selection of modern tailoring, elegant evening wear, casualwear, shoes and accessories. In addition, license income is generated from products, such as fragrances, eyewear, watches and children’s fashion. Sustainably increasing brand desirability is at the forefront of all Group activities and the main focus of the Company’s strategic framework. In 2020, the Company, based in Metzingen (Germany), employed approximately 13.800 people worldwide. Group Strategy

The Group operates with two brands – BOSS and HUGO – to approach customers in a clear and consistent manner. Both brands offer their customers an extensive selection of modern outfits in both menswear and womenswear so that they are perfectly dressed for any occasion. While the two brands clearly differ from each other in terms of their individual attributes, thereby addressing different customers, they both embody the same exacting values in terms of quality, fit and innovation. In addition to regular fashion events, cooperation’s with well-known brands and influential personalities are intended to increase the appeal and profile of BOSS and HUGO. In complying with ambitious social and environmental standards as well as sustainably manufactured products, both brands are highly committed to sustainability. Sustainability

BOSS is targeting a status-oriented customer in the upper premium segment who wants to dress in a modern, sophisticated way. The brand is targeting a customer who has the highest standards in terms of quality and fit, thus attaching great importance to an adequate value-for-money proposition as well as a first-class shopping experience, including personal service. In addition to the classic business outfit, BOSS customers also find a wide range of modern and stylish leisure looks.

In contrast to BOSS, the HUGO brand is targeting a much more expressive customer who considers style to be an important element in expressing their own personality. HUGO is aimed at an open-minded, individual and spontaneous customer in the premium segment who is increasingly purchasing online or on the go, and is inspired by social media. HUGO offers this typically younger segment of customers casualwear and businesswear collections in the contemporary fashion segment characterized by progressive designs.

The four annual BOSS and HUGO collections, as well as additional themed capsule collections, are mainly designed and developed at the Group’s headquarter in Metzingen (Germany). In addition, the competence center in Coldrerio (Switzerland) is responsible for innovation and development activities for a number of product groups. The development of capsule collections in cooperation with well-known brands and personalities is also becoming increasingly important. Research and Development

HUGO BOSS produces 17% of its total sourcing volumes at its own facilities. The Company’s own production occurs at four locations in Europe, with Izmir (Turkey) being by far the largest. 83% of the sourcing volume is produced by external contract suppliers or procured as merchandise. Partner operations are mainly located in Asia and Eastern Europe. Sourcing and Production

The BOSS and HUGO collections can be purchased in a total of 127 countries. The Group’s distribution activities are divided into three regions. With a sales share of 63%, Europe represents by far the largest region, whereas a total of 18% and 16% of Group sales are generated in Asia/Pacific and the Americas. Within the three regions, the six core markets – Germany, Great Britain, the United States, China, France and the Benelux countries – contribute a total of around 60% of sales, with the home market of Germany being the strongest contributor. The license business generates 3% of Group sales. Earnings Development, Sales and Earnings Development of the Business Segments

The BOSS and HUGO brands are distributed via the own retail and wholesale business, both online and in brick-and-mortar retail. In recent years, the Group’s own retail business has been gradually expanded to increase proximity to the customer and offer a first-class shopping experience. In 2020, the own retail business accounted for 66% of Group sales (2019: 65%). At the end of the year, the Group was operating 445 freestanding retail stores around the world (2019: 431). Complementing the store network, HUGO BOSS operates outlets as well as self-managed shop-in-shops in department stores within the concession model. Through a variety of omnichannel services, the brick-and-mortar retail business is closely linked to the Company’s own online business. For HUGO BOSS, the further expansion of its online business is of utmost strategic importance. The Company aims to consistently implement the trend towards online shopping and to fully exploit its growth potential in the future. In 2020, the Company made significant progress in expanding its online store hugoboss.com to further markets. Overall, customers at hugoboss.com can now experience the brand worlds of BOSS and HUGO and order products in a total of 47 countries (2019: 15 countries). Group Strategy

The wholesale channel contributed 31% to Group sales in the past fiscal year (2019: 32%). The Group’s wholesale partners include department stores, specialist retailers and franchise partners. Moreover, cooperation with specialized online retailers is gaining increasing importance. While department stores and specialist retailers sell the BOSS and HUGO products either in monobrand shop-in-shops or in a multibrand setting, franchise partners independently operate freestanding stores, mainly based in smaller markets not addressed by the own retail business. Overall, the wholesale business encompasses around 6,200 points of sale (2019: around 6,300), of which 243 freestanding stores are run by franchise partners. Including its own freestanding retail stores, shop-in-shops and outlets, customers can thus purchase BOSS and HUGO products at around 7,350 sales points of sale globally (2019: around 7,450). Group Strategy, Earnings Development

Group structure

All main management functions are based at the Company’s headquarter in Metzingen (Germany). HUGO BOSS AG, as the Group’s parent company, is responsible for managing the Group. As a German stock corporation, it has a dual management and control structure. Thus, the Managing Board has overall responsibility for the management of the Group and the implementation of the strategy. The Managing Board is monitored by the Supervisory Board, which is also on hand to advise the Managing Board. In addition to HUGO BOSS AG, the Group is made up of 63 consolidated subsidiaries that bear responsibility for their local business activities. This includes 40 subsidiaries that are organized as distribution companies, as well as three production companies. Notes to the Consolidated Financial Statements, Basis of Consolidation

HUGO BOSS is structured by region. The Group’s operating segments are Europe (including the Middle East and Africa), the Americas and Asia/Pacific as well as the license business.

The functions established in the central departments of HUGO BOSS AG cover all significant parts of the value chain, particularly the development, production, sourcing, and distribution of the collections to the respective markets. The centrally developed Group strategy is implemented and executed locally to ensure strict customer focus as well as to enable a timely reaction to market-specific trends. Individual markets are combined in hubs, with local management, as from January 1, 2021, reporting directly to the Chief Sales Officer (CSO) of HUGO BOSS AG. This is intended to ensure close alignment with the central functions as well as lean decision-making processes. In addition, certain functions are pooled in hubs and in central departments across markets to make the most effective use of specialist skills and to generate cost benefits.