In March 2023, Hugo Boss CEO Daniel Grieder proposed “Project Tango” to Austrian real estate investor René Benko, aiming to create a Fashion Investment Group to acquire stakes in Hugo Boss and other brands. The strategy involved attracting major investors, potentially acquiring shares in companies like Adidas, and Grieder’s leadership post-Hugo Boss. However, concerns arose over financial stability, insider information, and investor confidence as both Grieder and Benko faced significant challenges by late 2023.
Project Tango: A New Vision for Fashion Investment
In March 2023, Daniel Grieder, the CEO of Hugo Boss, reached out to Austrian real estate mogul René Benko with an intriguing email titled “Project Tango.” Grieder proposed the formation of a “Fashion Investment Group,” which would not only acquire a stake in Hugo Boss but also invest in various other fashion brands, essentially creating a robust investment entity in the fashion industry.
This ambitious venture was set to unfold in three distinct phases. Initially, Grieder sought to attract a group of key investors to become anchor stakeholders in Hugo Boss, acquiring shares through the stock market. The subsequent phase would involve either acquiring minority stakes in major brands like Adidas or fully taking over other fashion companies such as Bally or Bogner. Following his departure from Hugo Boss, Grieder intended to lead this investment group and explore additional investment opportunities, as highlighted in a presentation referenced in various reports.
Key Players and Strategic Moves
To operationalize the Fashion Investment Group, Grieder planned to enlist Christoph Zeiss and Martin Weckwerth for their expertise in securing Hugo Boss shares and facilitating the investment endeavors. Zeiss, a headhunter who initially connected Grieder with Hugo Boss, and Weckwerth, a former board member of the company, were both expected to have financial stakes in the new venture. Grieder expressed his desire to have Weckwerth onboard to expedite decision-making processes, as noted in his communication with Benko.
Grieder’s urgency was evident as he pushed for quick progress, aiming to unveil an expanded strategy during Hugo Boss’s investor day on June 12, 2023. He aimed to elevate the company’s revenue target from 4 billion to 5 billion euros, alongside a 12 percent EBIT margin by 2025, believing such targets would significantly boost the company’s stock price.
Despite their long-standing acquaintance, the collaboration between Grieder and Benko was only recently brought to light. Their connection dates back years, with Grieder owning a chalet in close proximity to Benko’s residence and Benko attending Grieder’s wedding in 2022. However, as Grieder reached out to Benko, concerns among Benko’s investors regarding the financial stability of his ventures were growing, leading to questions about the viability of the Fashion Investment Group.
The uncertainty surrounding this initiative raises several key questions: Was Grieder secretly planning to take control of Hugo Boss? Were the supervisory board members informed about these developments? Moreover, did Grieder’s email contain sensitive information that should have remained confidential?
While it remains unclear whether the information shared was stock-relevant, experts have noted that the unauthorized dissemination of insider information is strictly prohibited. Subsequently, Hugo Boss announced its ambitious revenue goals, but the company did not consider this news significant enough to warrant an urgent public announcement.
In response to inquiries about potential secretive plans, Hugo Boss firmly stated that there were no undisclosed strategies from Grieder at any time. The spokesperson emphasized that all relevant internal parties were kept informed about the preliminary ideas, which were never actively pursued.
As the fashion landscape continues to evolve, the fate of the Fashion Investment Group hangs in the balance. Both Grieder and Benko faced significant challenges in late 2023, with Benko’s Signa Holding filing for bankruptcy and Hugo Boss grappling with economic challenges. Investor confidence in Hugo Boss has waned, with the company’s stock value plummeting by nearly 50% since the start of the year.
In light of these developments, the union IG Metall Reutlingen-Tübingen has called for clarification from Hugo Boss regarding the investment group’s formation and the communication with internal stakeholders. The unfolding story of the Fashion Investment Group serves as a reminder of the complexities and challenges within the fashion investment landscape.