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Business

Hugo Boss is German Retail's Bright Spot

German clothing maker Hugo Boss is a shining light in an otherwise slumping domestic fashion market. 2005 sales are healthy and the company is opening a series of concept stores in world capitals, starting in Berlin.

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The Hugo Boss style has found a lot of paying customers

The company, with its focus on classic cuts, clean designs and high quality, has watched its sales outpace competitors in 2005, particularly in Germany, where the fashion sector has been stagnating for several years.

"Our sales are growing in Germany, despite the underlying negative trend," the company's chief executive officer, Bruno Sälzer, told reporters at the company's headquarters in Metzingen, Germany.

He has the numbers to prove it. On Thursday, Boss released figures for the first half of 2005, which show robust growth. Income in the first six months of the year rose 16 percent to 46 million euros ($55.5 million). Sales increased by 13 percent to 624 million euros and pre-tax profit jumped 14 percent to 67 million euros.

With the fashion sector in Germany shrinking by two percent, Boss has managed to buck the trend, showing a domestic growth rate of nine percent. In Europe, the increase was 12 percent, and in the US, a strong driver of growth, the clothing maker saw sales jump 15 percent from 68 million to 78 million euros.

Bruno Sälzer von Hugo Boss

Bruno Sälzer, CEO of the Hugo Boss

"We have been able to increase our market share in all important markets," Sälzer said. "I assume that we will be able to continue this development in the second half of this year."

The company said it expends to be able to report a 2005 profit of 100 million euros and a 10 percent increase in sales.

Concept stores

In keeping with the good economic times, Boss is planning further development of its brand. Part of the strategy is the opening of several high-end concept stores in several major cities. They are modelled after the Niketown stores, flagships of the US sports clothing manufacturer Nike, where presentation is as important as product. The idea is to associate the brand with good design and an entertaining experience. The stores have turned out to be magnets for shoppers.

In the central Berlin district of Mitte, the first Boss concept store has opened. Among its clothing, visitors at the store are surrounded by a sea 300 LED lights, folding doors in the changing rooms open at the touch of a button and clothing articles themselves hang on ultra-stylish aluminium stands or are arranged on shelves of weathered larch wood. Berlin is the first, but the idea is to be exported to branches in London, Paris and Tokyo. The stores are meant to be city specific, and the 350-square-meter Berlin boutique features a miniature relief of the capital.

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