Hugo Boss sees China sales improving this year
METZINGEN, Germany (Reuters) - German fashion house Hugo Boss (BOSSn.DE) said it expected to post higher growth in Asia this year, helped by a rebound on the China market, which stuttered last year.
Hugo Boss, known for its sharp suits, said its sales in Asia grew just 4 percent in 2012 at currency-adjusted rates, due to a difficult situation on the Chinese market.
The group had previously said that like-for-like sales in China, which strip out the effect of new store openings, had fallen in the second and third quarters of 2012 as shoppers cut back on trips to malls.
It said it expected stronger growth in Asia this year, echoing an upbeat view from watchmaker Swatch (UHR.VX).
"This should be supported by a gradual improvement in the growth rates in the important Chinese market," the group said in its annual report.
That contrasts with luxury jewelery and watches group Richemont (CFR.VX), 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 percentage in 2013, slower than in 2012 but still faster than growth predicted for the luxury market as a whole.
Growth will come in particular from eastern Europe, where it will focus on opening its own new stores in Russia, and the United States, where demand for its European-styled suits and shirts resulted in 2012 sales up 15 percent.
Consultancy Bain has forecast growth of 4 to 6 percent a year for the luxury market through 2015, after 10 percent in 2012, as growth in China, which has been driving the luxury market, slows.
Hugo Boss had already reported forecast-beating preliminary results for 2012 last month, with sales up 10 percent on a currency-neutral basis to 2.35 billion euros ($3.04 billion) and a 13 percent rise in earnings before interest, tax depreciation, amortisation (EBITDA) and special items of 529 million.
Hugo Boss also said it was on track for its medium-term target to increase sales to 3 billion euros and core profit to 750 million euros in 2015.
It increased the dividend for 2012 to 3.12 euros per share, from the 2.88 euros paid last year.
(Editing by Greg Mahlich)