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Hugo Boss profits dip

Profits at German designer business Hugo Boss dropped 5% to €88 million (£69.8m) for the half year to July 31.

Sales at the group rose 5% to €831m (£659.8m) and by more than 8% on a currency adjusted basis.

However, the company said that EBIT had been impacted by one-off charges relating to the recent management reshuffle which saw Claus-Dietrich Lahrs appointed chief executive of Hugo Boss in May.

Lahrs joined from Christian Dior Couture, where he was managing director.

He was also previously managing director of Louis Vuitton Deutschland for Louis Vuitton, Loewe, Céline and Kenzo labels. Prior to this he worked at the French luxury goods firm Richemont Group.

Hugo Boss’s former chairman and chief executive, Bruno Saelzer, resigned in February, after strategy disagreements.

Hellmut Albrecht was elected chairman of the supervisory board last month, taking over from Giuseppe Vita, who resigned from the post in June.

Hugo Boss said EBIT was up 9% not including the charges.

Hugo Boss predicted sales growth after currency adjustments of between 6% and 8% for the whole of the year, in line with its previous outlook.

Domestic sales showed a slight fall to €174m (£138.1m) from €177m (£140.6m) the previous year, while sales in the rest of Europe rose 4% to €299 (£237.5m), driven by the group’s own retail operation.

The brand’s business in North America and Asia showed double-digit sales growth. American continent sales were up 14%, with the US showing sales growth of 17% in local currency and 2% in euros to 106m.

Asia and the rest of the world achieved double-digit growth, up 33% in local currencies, with a 46% growth in China, adjusted for currency effects.

The company said it would develop more initiatives for growth such as the launch of kidswear under the Boss Orange label for spring 09.

The company had 307 company-owned stores at the end of the first half of the year. It operates in 105 countries and has 5,900 points of sale.

Sales at the group’s licensing business rose 10% to €21m (£16.6m).

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