In Conversation: Hugo Boss CEO Gerrit Ruetzel - Men's Folio
Interview

In Conversation: Hugo Boss CEO Gerrit Ruetzel

  • By Men's Folio

The past half year has been an exciting time for Hugo Boss, with the opening of its Omotesando flagship store in Tokyo as well as the appointment of Jason Wu as artistic director of the womenswear collection. Dr Gerrit Ruetzel, Hugo Boss president and CEO Asia Pacific, shares with us the his strategy for the Asian market and what we can expect from the brand in the future.

Below: Dr Gerrit Ruetzel (second from right) and guests at the opening of the Omotesando store.Hugo Boss CEO Gerrit Ruetzel at Omotesando Store Opening

The brand famed for its masculine tailoring, is signalling a shift in focus to its womenswear division with the recent hiring of popular New York designer, Jason Wu. Back in Singapore, the brand ended its two decades- long partnership with fashion retailer Kwang Sia, taking the brand in-house, and after much investment in the gold rush that is China, Hugo Boss is back to solidify its presence in the most  influential Asian market for luxury  and fashion – Japan.

“Japan has traditionally been a department store-driven market, but we’re seeing a shift towards freestanding stores in the last decade, and for us, it’s a strategic move for a lifestyle brand like Hugo Boss; it’s a way to showcase a wide breath of products – from apparel to accessories – to convey that lifestyle experience that we can’t achieve through department stores,” shares Dr Gerrit Ruetzel, Hugo Boss president and CEO Asia Pacific on the importance of the new flagship store.

Designed by renowned architect Norihiko Dan, the new 336 square meters flagship store showcases the Boss and Hugo Menswear collections; Located in the stylish district of Omotesando, the new store shares the same new-generation concept as its other flagship stores in Shanghai, Paris and New York. Housed in a unique steel-framed building, it features leafy, wood-grain patterning that imbues both the building and the essence of the Omotesando area with its bold and dynamic dimension.

Below: The Hugo Boss Omotesando store.Hugo Boss Omotesando Store

Men’s Folio: What’s the significance of the Omotesdando store opening and how does it fit into the context of Hugo Boss’s strategy for Asia?

Gerrit Ruetzel: The Japanese market still serves as an example in luxury and fashion, not just in Asia. Even Europe is looking at what’s happening here as well. We’ve been in Japan for more than 25 years – and it is by no means an easy market – but in the last couple of years, we’ve seen a really strong improvement in our business. In previous years, the money went to China, and there hasn’t been a major investment in Japan and so we decided to create a flagship store that not only produces a consistent shopping experience, but to also bolster the Hugo Boss image with a full product assortment. That’s part of our strategy, to have more flagships and freestanding stores in Japan.

Although Tokyo is a very departmental store-driven market – and though it’s still important, department stores are losing the dominance they once had a decade ago. Now we see a shift towards freestanding stores. Department stores limit a shop to around 100 to 200 square metres, with products spread over three floors, and it’s hard to convey the lifestyle experience and show what the brand stands for. As we consider ourselves, more than ever, as a lifestyle brand, it’s important to create these kinds of symbiotic and comprehensive presentation of our products. In most cases, freestanding stores are the only way to achieve that. If you want to create a certain impression to the consumer, and want to look competent in a certain product category, you need a more curated space.

The design of this store is unique; will we be seeing more of this concept in the coming Hugo Boss stores?

To be honest, we were very lucky that the owners selected us to have the building for our brand. The property owners already were planning the building before we entered the picture. We were looking for flagship store locations in Japan, in Osaka and in Tokyo, when this location came along. We were competing for this location with 20 other brands. Fortunately for us, the owner of the property, Mrs Shu Uemura, picked us. The building is the talk of the town, and is one of the few pieces of land left in the prominent area of Tokyo and they did an incredible job building it. When it comes to launching a flagship store, we use the same criteria for other projects: We may be looking at a longer payback, but it has to be within the lease period. We’re not a private company, so we always have to keep the commercial numbers in mind; we have people who invest in us, so we have to be very smart and creative in the way we spend  their money.

Hugo Boss Omotesando Store

Earlier this year, Hugo Boss ended its partnership with Kwang Sia group and brought the brand in house. Why now?

We’ve had a long working relationship with Kwang Sia spanning over 20 years, and they’re still our partner in Thailand. The reason why we’ve taken the brand in-house is that the trend is moving towards retail, and we’ve made the decision to make a lot of changes to the store experience in Singapore – renovating and expansion, and it comes to a point where we have to ask ourselves if it’s fair to insist that our franchise partners financially committing to those changes just so they’re more in line with the brand’s direction. Singapore is without a doubt a travel hub within the region, and it’s important for us that the consumers have a consistent shopping experience here as they do back in Europe or Hong Kong. It’s really a matter of Singapore being a strategic port for us.

What criteria do you consider before entering a new market?

There’s no standard format. Typically we can only make the decision after we’ve visited the country. We usually base our decisions on macroeconomic indicators, establishing links with locals to see if there is an affluent community that are potential consumers, and sometimes I check flight route maps in airline magazines, and if I see heavy traffic of people from certain countries making their destination there, it shows great potential. Currently, we’re looking at Cambodia. it may seem too early, but I think we’re looking at just one store to set the presence. There should be enough affluent people there to make it profitable, because currently they’re buying Hugo Boss from Singapore. But we still see the importance of partnership in new markets, so the franchise model is still a good model since we need to team up with people who understand the market and know the shopping behaviours before we open a new store.

Hugo Boss Omotesando Store

In a past interview, Hugo Boss is said to be looking to Asia in expanding its group sales – from 15 per cent to 21 per cent by 2015. Will retail strategy be a main driver for growth?

We still rely on wholesale. For example, the travel retail and the duty-free business are growing heavily, in the double digits. This year, we’ve opened stores in different airports of Asia Pacific. It’s been growing in the past couple of years and it shows that wholesale is still an important component in our strategy. Recently, Hugo Boss opened a Hugo store in Hong Kong, a collection that’s not so prominent in Asia.

Will we be seeing more Hugo openings in the region?

Absolutely. We see a huge opportunity for Hugo in Asia. If you look at Asia Pacific, there are two markets that Hugo is comparatively strong – Japan and Australia. We didn’t really push for Hugo expansion so much in the past. We wanted to make sure our Boss business is strong and invest our money in bigger and better location. What we see now is that typically the Asian consumers are more fashion-forward than the American and European consumers, and it’s a great reason for Hugo to enter the market. The case with China now is that a lot of people are talking about logo tiredness, but i think it’s more about the consumer’s move towards individual statements. They get tired of wearing the same outfit or bags as others in their circle, so what we’re seeing is a trend towards edgy brands like Hugo. This coupled with the already trendy fashion sensibilities of Asian consumers build a strong case for entering the market. The biggest limitation is finding the right venue that fits the brand aesthetics, which naturally limits the opening of Hugo stores.

Below: Hugo Boss womenswear artistic director Jason Wu.Hugo Boss womenswear artistic director Jason Wu

Jason Wu was recently appointed as the Artistic Director for women’s wear division – how does he fit into the Hugo Boss brand?

We’re even surprised by the positive reaction we received on this appointment. One of the reasons why we picked Jason Wu is not just because he’s incredibly talented; he has a refined yet explicit commercial skill. If you look at his career, he’s one of the few designers who managed to gain prominence without the help of a fashion house. He was big before he partnered with us. Compared to other famous designers that stepped up their career ladder the moment they cooperated with big fashion conglomerates, Jason came into his own with limited means to become who he is today. From day one, he had to be creative and commercial at the same time, and to our board, that’s a very important factor in their decision making. There are many talented people out there, but not many can merge artistic talent with commercial skills. It was also Jason’s decision to work with us. You can’t force a creative talent to work with you, and we’re certainly not the first brand to approach him. But the difference is that most brands asked him to drop his own label and work exclusively for them. That’s one thing that never crossed our minds – we told him that he can design for Hugo Boss and still have his own collection. I think that’s one of the reasons that made a difference.

Will there be a similar counterpart for the male division?

 I can’t answer that at the moment, because it’s up to our global chairman and board to decide if there should be a counterpart for the male division or if Jason will ultimately head both divisions. His title is artistic director, which already indicates that his work goes beyond design or the creation of the collection. He has a say in the campaigns for both men’s and women’s collections, and he will exercise more influence on store designs to make sure both collections are more cohesive.

With Jason Wu on board, the focus is placed now on Hugo Boss’s womenswear collection. What’s the current customer profile for Hugo Boss?

Globally, the ratio of menswear to womenswear is around 90 per cent to 10 per cent. Last year, we finish the year with a profit of Euros 2.3 billion. Now, 10 per cent of that may not seem much, but if you look at that in comparison to some specialty women’s brands, we’re doing pretty well in that segment. i can’t give you the forecast of how womenswear will be doing on a global level in the next few years, but based on our current collection, we do reach percentages way above 10 per cent and see a lot of potential for growth. We’ve come a long way with our collection in the last decade, and Jason’s hiring shows a strong commitment to our womenswear collection and it’ll be a strong contributor to the growth of the company in the future.

Hugo Boss Omotesando Store