METZINGEN: German fashion house Hugo Boss said it expected stronger sales in Asia this year, helped by a rebound on the China market, which stuttered last year.
“With a new government in place, with big investment plans, we see a gradual improvement in China in 2013,” Chief Executive Claus-Dietrich Lahrs told Reuters Insider television, adding that the brand’s presence in the region would be helped when it hosts a fashion show in Shanghai at the end of May.
Hugo Boss, best known for its sharp suits, said its sales in China rose just 4 per cent in 2012 after like-for-like sales, which strip out the effect of new store openings, had fallen in the second and third quarters of 2012.
The upbeat comments on China echo a similar view from watchmaker Swatch but contrast with luxury jewellery and watches group Richemont, which said in January sales growth had ground to a halt in the Asia-Pacific region.
For the group as a whole, Hugo Boss expects sales and core earnings to rise by a high single digit per centage in 2013, slower than in 2012 but still faster than growth predicted for the luxury market as a whole.
That outlook disappointed some analysts, however, and the shares, which have risen 19 per cent over the last year, were down 2.2 per cent at 88.25 euros. The consensus market forecast before the results was for core profits to rise 10 per cent in 2013 to around 583.6 million euros and sales to rise 7 per cent, according to Thomson Reuters Estimates.
Growth will come in particular from eastern Europe, where Hugo Boss will focus on opening its own new stores in Russia, and from the United States, where demand for its European-styled suits and shirts resulted in a 15 per cent rise in sales last year.