Hugo Boss receives loan linked to sustainability goals
Hugo Boss has secured a revolving syndicated loan with a sustainability component, making it the latest fashion brand to link its financing with its sustainability goals.
The syndicated loan is classified as sustainable finance, which fulfils key environmental, social and government (ESG) criteria. The interest rate for the €600 million loan is linked to the fulfilment of the sustainability criteria.
The interest rate will be adjusted annually based on the achievement of target values defined by Hugo Boss across four ESG areas: the reduction of CO2 emissions, the share of women in management positions, fair working conditions at suppliers, along with the use of more sustainable cotton.
Hugo Boss hopes the syndicated loan will provide the brand with additional financial flexibility to ensure the successful execution of its CLAIM 5 growth strategy.
Over the next five years, this strategy will see the luxury brand place the consumer at the core of its business activities, while intensifying its focus on its commitment to sustainability.
The loan has a three year term and includes two options to extend the term by one more year in each case, plus an option to increase the credit amount by up to €300 million.
Yves Müller, CFO of Hugo Boss, said: "This successful transaction reflects our lenders’ great confidence in our growth strategy.
"The loan commitment gives us additional financial flexibility to consistently and successfully execute CLAIM 5 over the coming years. I am also encouraged that the terms of the loan are for the first time tied to our performance and progress made in the important area of sustainability."