European Central Bank holds interest rate steady, World Bank predicts single-digit economic growth, a record number of Germans fail to pay their bills and more.
Trouble taking off: A model works Hugo Boss's recent womens' line on the runway.
Profits Slump at Hugo Boss
The German market leader in men's fashion, Hugo Boss, on Thursday reported sales of €1.1 billion for 2002 -- matching its figures from the year before. But net profits fell by one-third to just €74 million. Diminished profits were attributed primarily to the company's "Boss Woman" line, which has failed to win the hearts of consumers. Critics say that the first three Boss Woman collections were poorly cut, non-starters. Last year the company brought on Bruno Sälzer as its new CEO to turn the line around. The ambitious fashion executive has said he will drive Boss Woman to profitability this year. Within six years, he says he intends to make Hugo Boss a leading brand in the upscale womens' fashion market.
European Central Bank Holds Interest Rate Steady
The board of the European Central Bank, as expected, left interest rates unchanged at its meeting on Thursday. Speaking at the first policy meeting held by the ECB board since the beginning of the war in Iraq, President Wim Duisenberg (photo) said, "it is not possible at this juncture to assess what effect the war will have on the global economy." Thus, until a forecast emerges, the benchmark lending rate in the euro zone will remain locked at 2.5 percent.
World Bank Predicts 1.4 Percent Euro Zone Growth
Interests rates aren't the only thing on hold in the euro zone. On Wednesday, the World Bank issued a forecast of 1.4 percent economic growth across the euro zone for the year, with growth of 2.6 percent first expected in 2004. The body said an expected interest rate drop by the ECB later this summer could fuel growth. The report also predicted that the euro zone could experience 10 percent growth if it deregulated its labor markets and promoted competition as aggressively as the United States. The loosening of labor laws alone would reduce unemployment across the euro zone by 3.5 percent.
Fewer Germans Paying their Bills
As the German economy stagnates, more and more people and companies are shirking their duty to pay outstanding bills. During 2002, the number of court cases involving people who didn't pay their bills rose 7.2 percent to 1.4 million incidents, the Hamburg-based business information clearinghouse Bürgel reported on Thursday. Of those, around 471,000 debtors were threatened with arrest, a 5.3 percent rise.
Compiled with information from wire services.