Managing efficient use of capital through trade net working capital

Owing to the low-capital-intensive nature of the HUGO BOSS business model, trade net working capital is the most important performance indicator for managing efficient use of capital.

Management of inventories as well as trade receivables and trade payables is charged to the central operating functions and distribution units. These three components are managed using the indicators days inventories outstanding, days sales outstanding and days payables outstanding, which are partially factored into the variable renumeration of management of the central functions and distribution units. Furthermore, the ratio of trade net working capital to sales is set as one of the Managing Board's targets and is reported as part of the planning process and monthly reporting.