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ESCADA, the upmarket German fashion
house with an outlet on the Capital's George Street, has
seen its profits jump by almost a fifth in the second
quarter of its financial year.
The luxury womenswear retailer said earnings
before interest, tax, depreciation and amortisation (ebitda)
rose to almost £9 million due to higher profitability
and cost cutting.
Despite a decline in sales, which dipped
to just over £100m, the company, whose £5000
evening gowns are a Hollywood favourite, predicted further
growth.
Escada said it expected ebitda to increase
by at least £6m for the full year to the end of
October and that after-tax profit was rising more than
proportionally. Sales should see a low, single-digit percentage
growth, according to Escada chief executive, Wolfgang
Ley.
"Our collections get a positive
feedback by retailers and clients," he said, backing
up upbeat statements made recently by other German fashion
houses, such as suit maker Hugo Boss.
But Volker Bosse, HVB analyst, cut the
Escada stock from out-perform to neutral and raised his
price target in view of the sales decline.
Escada's shares have gained 31 per cent
over the past year in the wake of a staffing overhaul
which saw a fifth of its workforce axed.
Its shares are as costly as the stock
of Hugo Boss, with both trading around 17 times 2005 earnings.
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