Dear Shareholders,
Ladies and Gentlemen,

The figures in this report demonstrate that the HUGO BOSS Group maintained its market position and continued its positive sales trend from previous years despite the debase economic situation and the resulted consumption decrease. Sales in 2008 amounted to EUR 1,686 million, a year-on-year increase after adjustment for currency effects of 6%. However, we recognizes that it will be confronted with a challenging market environment and the danger of increasing consumer restraint in the coming fiscal year 2009, since finance- and banking crisis is having an increasing effect on the real economy.

The fact that HUGO BOSS set its course at the right time is paying off, especially in these weak economic times, allowing it to reap the rewards of the Group’s global positioning – particularly in light of our focus on the dynamic fashion markets of Asia in recent years, where we have participated in the growth trend. We also see additional growth potential on the American continent. Despite the general trend of consumer restraint, sales in the U.S. after adjustment for currency effects rose by 12% in fiscal year 2008.

Our stated target for the coming years remains to generate sustained positive development in our international markets, and particularly to increase our share as a percentage of total sales in the dynamic regions of Asia, Eastern Europe and North America, while ensuring that this global growth is accompanied by a continued strong presence in our traditional sales markets. On this basis, we intend to increase our share of sales outside Europe to almost 50% of total sales in the medium term. This growth strategy is linked to a strategic realignment based on a regional structure and a streamlining of the whole organization. We are convinced that this growth strategy is correct and that growth opportunities will open up in the coming years as well.

In addition, a significant proportion of the growth potential for the high degree of popularity of HUGO BOSS’ high-quality brands is an equally exclusive sales environment. Accordingly, our growth strategy is focused on the expansion of our successful directly operated shops store system. In fiscal year 2008, HUGO BOSS increased the number of directly operated stores around the world to 330 and over 1,000 franchise stores. Over the coming year, we intend to press ahead with our own-brand retail activities.

All HUGO BOSS brands stand for top quality, excellent workmanship, and outstanding design. This objective is reflected in our relationship with suppliers and sales partners. HUGO BOSS has intensively controlled the quality of the materials used for a number of years, and cooperates with its suppliers on an ongoing basis with a view to further optimization of the production process. Excellence is also a vital factor in the market and in our contacts with retail partners. To this end, reliability of supply and a continuous exchange of information with our wholesale partners around the world are core elements of HUGO BOSS’ business approach.

Based on these high quality standards, we aim to optimize further the presence of the HUGO  BOSS brand family in the future. Every product line – from the classic BOSS Black line through to the trend-conscious HUGO brand or the BOSS Orange and BOSS Green lines down to the premium BOSS Selection label – already has an unmistakable identity. We will accentuate the individual image of these lines even more in the coming year, in doing so more precisely tailoring them to the individual target groups within the HUGO BOSS brand family. BOSS Selection will be given a key role in this. Thanks to this line’s excellent quality, the HUGO BOSS Group will also attain an excellent position at the top of the international luxury segment.

By maintaining our proven growth strategy and expanding it out with new initiatives, HUGO BOSS will continue to offer solid key figures to its investors. Over the coming year, we intend to focus on further emphasizing this fundamental strength to ensure that we are well positioned even in challenging times, thereby ensuring that we retain the confidence of our investors for the future.

Sincerely yours,

Claus-Dietrich Lahrs
Chairman of the Managing Board
Metzingen, March 2009