UPDATE 2-Hugo Boss eyes stronger growth in 2014 as new stores drive sales
* Q4 adj EBITDA 157 mln eur vs poll avg 158 mln * Q4 sales 649 mln eur vs poll avg 663 mln * CFO expects faster growth in 2014 * Shares down 1.7 pct By Victoria Bryan FRANKFURT, Feb 7 (Reuters) - German fashion house Hugo Boss said it was confident of stronger growth this year as it continues to open more of its own stores, its new womenswear designer launches his first collection, and as the recovery in Europe takes hold. "We are seeing enough signs that we can grow faster in 2014 than we did in 2013," Chief Financial Officer Mark Langer told Reuters after the group reported a 6 percent rise in 2013 sales on Friday. Hugo Boss expects sales from its own stores will rise by over 10 percent in 2014, while wholesale revenues will be flat, Langer said. The group, known for its men's suits, has been moving away from selling through partners to running its own stores, where it has more control of how goods are displayed and what price they are sold at, helping to improve its margins. In a bid to shake up its womenswear business, which it has struggled to expand as fast as originally hoped, it has hired Jason Wu, a U.S.-based designer whose dresses have been worn by First Lady Michelle Obama and actresses Reese Witherspoon and Diane Kruger. The investment in its own stores, with a further 50 planned this year, and marketing around Wu, plus slower luxury spending in China, means Hugo Boss last year postponed its 2015 target to reach a 25 percent margin - core profit as a percentage of sales. "We are concerned that growth will again be held back this year by additional brand investments," Commerzbank analyst Andreas Riemann said in a note. Langer said the group would still be improving margins over the next couple of years, only more slowly than expected. Shares dropped 1.7 percent on Friday, as sales in the fourth quarter came in slightly below expectations after growth slowed in the United States and China remained subdued. Europe, which makes up 60 percent of sales, developed very positively, Langer said. Hugo Boss reported fourth-quarter adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of 157 million euros ($213.5 million) on sales of 649 million euros. For 2013, sales rose 6 percent to 2.43 billion euros, at the low end of its target range of 6-8 percent for both sales and profit. EBITDA increased 7 percent to 565 million euros and Langer said this means an increased dividend is likely. Langer also said Hugo Boss still viewed emerging markets as a good source of growth, despite the recent devaluation of currencies in countries like Turkey and Brazil affecting how much it costs to operate there. "Emerging markets make up only 16 percent of our sales. We see a very attractive and profitable opportunity to grow in countries like Brazil, Turkey or Russia." Hugo Boss will release full annual results and a 2014 outlook on March 13.
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