German luxury house Hugo Boss, has announced that it has secured a revolving 600 million euro syndicated loan with a sustainability component, which means that the interest rate is tied to the achievement of specific sustainability goals. The loan intends to give the fashion firm the financial flexibility it needs to carry out its Claim 5 growth strategy successfully.
The loan's interest rate will be adjusted annually based on Hugo Boss' achievement of target values in four ESG areas: CO2 emissions reduction, the share of women in management positions, fair working conditions, and the use of more sustainable cotton.
The loan will have two possibilities to extend the duration by one year throughout its three-year term, as well as the ability to increase the credit amount by up to 300 million euros. It replaces the company's current syndicated loan, which totaled 633 million euros.
The loan was syndicated by nine foreign banks, with Commerzbank and BNP Paribas acting as joint bookrunners.
The company's Claim 5 strategy, which was announced earlier this year, focuses on increasing brands, a product-focused outlook, digital expansion, rebalancing omnichannel, and organizing for growth.
Hugo Boss also intends to further up its environmental initiatives, with the goal of providing tangible added value and increasing emotional involvement with customers.
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