Events after the balance sheet date

As of March 11, 2008, no material operational changes, structural modifications, or business events had occurred in the HUGO BOSS Group that might serve to significantly alter financial position and financial performance in comparison with December 31, 2007.

Report on opportunities

Opportunity management

For many years HUGO BOSS has been the most successful international fashion company in the high-end fashion market segment, and continues to offer additional growth and profit potential. All divisions within the organization are focused on identifying, analyzing, and making appropriate use of opportunities to secure the continued market position of the HUGO BOSS Group. The Group headquarters in Metzingen provides the strategic framework and secures the financing and liquidity of the entire Company.

Strategic areas of growth

The success in the past in the strategic growth areas of BOSS womenswear and shoes and leather accessories, as well as the Group’s own retail activities, continues to offer major growth opportunities. The strategy of retail expansion not only leads to a potentially higher gross profit margin due to increased vertical diversification, but also permits closer contact with end customers and thus a more targeted and proactive presentation of the Company’s product assortment and the flexibility to respond to changes in the markets.

In addition to the most important strategic growth initiatives, opportunities also exist in the licensing business and through regional expansion. With the Austrian Swarovski Group for jewelry, HUGO BOSS will continue to utilize the existing growth potential in these areas in 2008.

HUGO BOSS also sees opportunities for regional expansion, particularly through the broadening of distribution in North America, expansion of its leading market position in Eastern Europe, and China as a rapidly growing luxury market will also drive the growth of HUGO BOSS in Asia.