German fashion group Hugo Boss today reported a 12% increase in sales for fiscal 2005, and said it expects sales and earnings growth to be slower in 2006.

The company said its record sales of EUR1,309.4m (US$1,579.4m) in 2005, up from EUR1,168.4m in 2004, were boosted by the "successful realignment of its business with the three growth segments of Womenswear, Shoes and Leather Accessories, and Directly Operated Stores (DOS).

Sales of Boss Womenswear climbed by 38% to EUR95.7m, while sales in the group's Directly Operated Stores (DOS) business rose by 41% to EUR137.5m.

Net income rose by 23% to EUR108.2m, up from EUR88.2m in 2004.

"We are well positioned for the future and are confident that we can continue to grow significantly stronger than the global fashion market," said Dr Bruno Sälzer, chief executive officer in his outlook on fiscal 2006.

He told a news conference that pretax and net profits and sales should all rise between 7% and 9% this year.