By  on March 22, 2007

METZINGEN, Germany — Hugo Boss is bullish about 2007, projecting rising sales and income, as well as signing a licensing agreement with a Swarovski Group subsidiary for men's and women's fashion jewelry under the Boss brand names.

Chief executive officer Bruno Sälzer said during the German apparel giant's annual news conference here Wednesday that currency adjusted group sales would grow 8 to 10 percent, and income before taxes would rise 12 to 15 percent in the year ahead.

The revenue projections come after benchmark sales and earnings in 2006. Hugo Boss reported in January that group sales rose 14 percent to $1.88 billion, or 1.5 billion euros, with net income for the year surging 19 percent to $162.1 million, or 129 million euros. All dollar figures have been converted from the euro at annual average exchange rates.

Sälzer said the optimistic outlook for 2007 is supported by strong preorders for the fall-winter season, as well as earlier than expected savings generated by the so-called Columbus project. This IT initiative, which began in 2004, is intended to boost synergies and streamline organizational and supply chain operations.

Boss Womenswear is anticipated to continue its dynamic growth in 2007, with currency adjusted sales forecast to increase 25 percent, Sälzer said. Directly operated stores, which in 2006 contributed 13 percent of group sales, are projected to increase that share to 15 percent. Seventy stores are slated to open this year: 20 freestanding units and 50 shop-in-shops in department stores, involving a total investment volume of 95 million euros or roughly $126.3 million at current exchange rates.

Sälzer predicted 2008 would bring "new records in turnover and income" for the group.

In addition, Hugo Boss and Amazar Holding AG, of Swarovski Group, have signed a six-year licensing deal that went into effect March 1.

The first collection of Boss Black and Boss Orange jewelry will be presented in spring 2008, and will be available in Hugo Boss stores and selected department and jewelry stores worldwide in July 2008.

Sälzer declined to comment on first-year sales goals for the venture. However, he said jewelry represented an "important step. Accessories are a key growth segment for Hugo Boss, and extending our product portfolio to include exclusive fashion jewelry represents a logical next step."In an official statement, Daniel Cohen, a member of the executive board of Swarovski's crystal business and president of the Amazar Holding AG board of directors noted that via Amazar, Swarovski is addressing new segments beyond its core crystal business.

"Building on our competence in fashion jewelry, we will be creating exclusive creations reflecting the identity and signature design of the individual Boss fashion lines," he said.

That is expected to translate into elegant pieces for Boss Black, eclectic looks for Boss Orange and luxury cuff links for Boss Selection.

As for the choice of Swarovski, Sälzer commented, "In the last years, we have sought license partners that are market leaders, and that is true of Swarovski."

Hugo Boss has three other licenses: Procter & Gamble for fragrance and cosmetics, Safilo SpA for eyewear and Movado for watches.

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