UPDATE 2-Hugo Boss benefits from U.S. demand, tight stock management

Wed Jul 31, 2013 12:35pm EDT
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* Q2 sales up 11 pct to 532 mln euros

* Q2 core profit 102 mln euros vs I/B/E/S forecast 95 mln eur

* Gross margin jumps to 65.8 pct, from 62.4 pct

* Confirms targets for 2013

FRANKFURT, July 31 (Reuters) - German fashion house Hugo Boss said tight stock management and fewer discounts drove up profits and that shoppers in the United States helped offset a still-challenging market in mainland China.

The company's second-quarter rise in sales and profit are further evidence of a rebound in the luxury sector after rivals LVMH and Kering reported accelerating sales growth and higher profits this month.

In the past year China's luxury market, which had been the industry's main growth driver, has been hit by a slower economy and the government's crackdown on the country's tradition of gift-giving to facilitate transactions and deals.

Hugo Boss's Chief Financial Officer Mark Langer said the number of people visiting malls in some smaller cities in China had fallen by as much as 20 percent, and that the group had to bring the quality of its mainland stores up to those in Hong Kong.

The fashion house said that in the United States, its biggest market, and Europe, it benefited from tourists from Asia and Latin America spending money on its suits and shirts.   Continued...