METZINGEN, Germany - The German fashion house Hugo Boss AG said that it expects the Chinese market and its expanding network of own-brand stores to drive double-digit growth in both sales and earnings this year.

The group, known for its sharp suits, said it expects sales to grow at least 12 percent and underlying earnings to rise at least 15 percent. "We closed 2010 with excellent results and have maintained this dynamic into the new year," Chief Executive Claus Dietrich Lahrs said on Tuesday.

Hugo Boss had already published preliminary results in February, showing sales of 1.7 billion euros ($2.40 billion) and earnings before interest, tax, depreciation and amortization were 350 million euros.

The clothing company reported 7 percent sales growth for 2010 as a whole, with the pace of improvement picking up to 24 percent in the final quarter of the year as the luxury market continued to rebound.

Hugo Boss said European brands in particular were expected to benefit most from rising wealth in China. Louis Vuitton SA, the world's largest luxury goods company, said last month that Chinese clients were "infatuated" with its brands.

Hugo Boss said growth in the North and South American markets would also exceed that of Europe, where fiscal restraints are expected to weigh on consumer spending. The company also said 2011 growth would be driven by a strategy to open more of its own stores.

It ended 2010 with 537 stores, compared with 438 a year earlier.

Last month, for example, it took over 15 franchise stores in the UK from retailer Moss Bros. Hugo Boss said the integration of the stores would have a positive effect on sales and profit from April this year.

Other clothing companies, including Gerry Weber AG and Burberry Group Plc, have also been expanding their own-store networks to take advantage of the higher margins they bring.

Reuters