FRANKFURT, June 28, 2007 (AFP) - Escada, the German maker of luxury ready-to-wear women's clothes, warned Thursday, June 28th that it expected to end its current business year in the red as a result of tax changes and restructuring costs.

Escada's campaign spring-summer 2007

One-time expenses for the structural optimisation programme and additional write-offs from the new valuation of capitalised deferred taxes will mean that Escada will close the 2006/2007 business year with an after-tax loss of approximately 25 million euros (33.5 million dollars)," the group said in a statement.

It put the cost of the restructuring measures at an estimated 35 million euros and the tax changes were expected to result in a write-down of around 14 million euros.

Escada, which runs its business year from November to October, said that underlying profits and sales would grow "moderately" on a year-on-year basis, "in the region of a single percentage point."

In the first six months of the year, Escada clocked up net profit of 9.3 million euros, compared with a year-earlier loss of 3.0 million euros.

Operating profit edged up by 1.9 percent to 37.6 million euros on a 3.7-percent rise in first-half sales to 332.1 million euros, Escada said.