Fashion and textiles group Marzotto SpA said first-quarter 2005 sales and profits grew on good performances at its Hugo Boss and Valentino clothing units.

First-quarter net profit rose 35 per cent to €30 million from €22m in the same quarter last year, while sales grew to €572m from €531m a year ago.

Hugo Boss and Valentino saw sales increases of 14 per cent and 16 per cent respectively, but Marzotto's textiles segment reported a 16 per cent sales slump to €60m.

Marzotto predicts better operating margins at its clothing units for 2005, alongside double-digit sales growth. It also anticipates improved operating profit within its textiles operations due to its restructuring strategy.

Marzotto's board of directors in December instructed its chairman to explore a possible spin-off and bourse listing of its textile division.