GERMANY: H1 loss for Boss thanks to executive pay-offs
German fashion label Hugo Boss slid to a first-half loss of EUR6.1m (US$9.5m) thanks to payments made to departing executives.
The company's sales were up 5%, or 8% on a currency-adjusted basis, to EUR831m in the first six months of 2008, led by revenue increases in America and China.
Second quarter sales increased 9.1% to EUR321.1m. But group EBIT was down 5% to EUR88m, thanks to adjustments linked to payments made to departing executives in the wake of parent company Valentino Fashion Group's takeover by Permira last year.
Underlying EBIT was up 9%, while the EUR6.1m net loss compared to a net loss of EUR6.2m for the same period last year.
The company reported European sales up 4%, despite a slight decrease in sales in Germany, driven by rising revenues in the group's own retail stores.
Sales were up 14% in local currencies in America as a whole, with US sales up 17% in dollar terms, but only 2% in euro terms.
There was also double-digit growth in Asia, where sales were up 33%, thanks to a 46% surge in China.
Hugo Boss reaffirmed its 2008 guidance, projecting sales growth of 6-8% after currency adjustments, and EBIT increases of 8-10% after adjustments.
The company's new CEO, Claus-Dietrich Lahrs, joins Hugo Boss tomorrow (1 August) from Christian Dior, replacing Bruno Saelzer. CFO Joachim Reinhardt is also leaving the company today.
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