Sept. 23 (Bloomberg) -- Escada AG, the German maker of luxury women's clothes that named a new chief executive in July, fell the most in more than five months in Frankfurt trading after reporting lower sales and saying its loss may widen.

Escada declined 95 cents, or 8.7 percent, to 9.95 euros, the biggest drop since April 15.

The company, which cut its annual forecast twice this year, reiterated that it expects a loss for fiscal 2008 and added it may be bigger than last year's 27.4 million euros ($40.4 million). Escada named Bruno Saelzer, the former head of Hugo Boss AG, chief executive officer, replacing Jean-Marc Loubier after one year in the job. The move was engineered by Germany's billionaire Herz family that became Escada's largest shareholder in July, replacing Russian millionaire Rustam Aksenenko.

``Escada's main markets, including the U.S. and Spain, are weakening,'' said Joerg Frey, an analyst at Bank Sal. Oppenheim in Frankfurt who advises selling Escada stock. ``Investors will have to wait for next year's fall/winter collection before seeing improvements with the new management.''

The net loss narrowed to 11.3 million euros in the third quarter through July from 13.4 million euros a year earlier, the Munich-based company said on its Web site today. Sales fell 14 percent to 134.6 million euros.

Revenue at the main Escada clothing division fell 16 percent to 91.6 million euros. Sales declined 10 percent to 47.9 million euros at the Primera unit, which sells cheaper women's fashions under the BiBA, Laurel, cavita and apriori brands. Escada has said it plans to sell Primera.

``The acceptance of the Escada collection has not improved, in our view, and luxury markets are becoming more difficult,'' Michael Kuhn, an analyst at Deutsche Bank AG in Frankfurt, said in a note before the figures were released. New management won't have a significant impact before the middle of next year, he said. He has a ``hold'' rating on Escada.

Escada's product range includes calfskin handbags covered in fox fur and handmade cashmere coats for more than $3,000 each.

To contact the reporter on this story: Holger Elfes in Dusseldorf at helfes@bloomberg.net.

Last Updated: September 23, 2008 11:52 EDT