BERLIN — Affected by the cost of store openings, Hugo Boss reported a net loss of 5.5 million euros, or $6.9 million, on a 16 percent rise in sales to 252.2 million euros, or $316.7 million, in the second quarter ending June 30.

But the loss represented an improvement on the year-earlier period, when losses totaled 6.2 million euros, or $7.8 million. And Boss’ net income for the first half surged 19 percent, to 54.2 million euros, or $68.1 million.

Rising operating income and expenses, primarily relating to store openings, significantly affected second-quarter earnings before interest and taxes, which fell 26 percent, to a loss of 8.3 million euros, or $10.4 million. Nine directly operated Boss stores were opened in the second quarter, bringing the number of directly operated stores to 187, compared with 82 in June 2005.

Boss Woman sales were up 82 percent in the second quarter, to 28.9 million euros, or $36.3 million, and climbed 73 percent in the first half, which the company attributed partially to the successful launch of Boss Orange Womenswear. Net earnings for the women’s division in the first half of 2006 reached 2.5 million euros, or $3.1 million, compared with 600,000 euros, or $756,570, in the same period in 2005.

Geographically, group sales in the still sluggish German market rose 8 percent in the first half of the year, sales in the rest of Europe increased 16 percent and Boss’ American business grew 22 percent in euros (17 percent in local currency), to 96 million euros, or $120.6 million.

For the full year, Boss is projecting currency-adjusted sales will grow between 10 percent to 12 percent, with a proportional rise in earnings before taxes.

This story first appeared in the July 28, 2006 issue of WWD. Subscribe Today.

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