Hermès not so big in Japan after VAT hike

 

Japanese shoppers kicked their habit of buying Hermès silk scarves and Birkin handbags after a VAT hike hit the luxury goods company’s sales growth in the country.

The French leather goods specialist said sales in the region had risen 21.7 per cent in the first quarter before the VAT rise on 1 April. But the second quarter only saw a rise of 1.6 per cent, meaning overall sales growth in the first half was up only 8 per cent.

Sales for the Paris-based firm were also weaker in the US as a strong euro and fluctuating foreign currency hurt sales. US sales slowed to growth of 7.9 per cent, down from 17.9 per cent in first quarter.

Hermès’ second quarter sales advanced 5.8 per cent to €963m (£563m), below analyst expectations.

The first-half sales reached €1.9bn – up 12 per cent on the previous year and only 8 per cent higher when taking into account currency changes.

The company warned its first-half operating margin – which it will reveal next month – will be lower.

Hermès had previously benefited from restraining production – many of its most popular handbags are purchased via long waiting lists.

However, it has been slowly increasing its supply and the group opened two factories in 2012 in Isère and Charente and plans two new facilities in the Franche-Comté region where construction work has begun.

The leather focused group said Asian sales, excluding Japan, were strong – up 17 per cent – and it said it was “maintaining its dynamism, most notably in China.”

Over the first half, leather sales grew 13 per cent, ready to wear clothing and accessories rose 16 per cent, silk was up 11 per cent but watches fell 7 per cent due to the crackdown on gift giving in China.

Despite the issues for Hermès, the king of cashmere, Italian luxury brand Brunello Cucinelli, reported strong demand in the US and China this week. The cashmere sweaters and scarves group, which is listed in Milan, reported an 11.6 per cent rise in first half sales to €175.8m with growing demand in the United States and Asia.

But the gift giving restrictions in China has also hurt French cognac-maker Rémy Cointreau. First quarter sales fell 5.7 per cent to €214.8m.

Cognac sales make up 80 per cent of operating profit, with half of this coming from China, and the group said it was continuing its “de-stocking efforts in Asia” to match “consumption trends”. In contrast, sales at its spirits division rose 11.3 per cent.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

SThree: Talent Acquisition Consultant

£22500 - £27000 per annum + OTE £45K: SThree: Since our inception in 1986, STh...

Day In a Page

John Palmer: 'Goldfinger' of British crime was murdered, say police

Murder of the Brink’s-MAT mastermind

'Goldfinger' of British crime's life ended in a blaze of bullets, say police
Forget little green men - aliens will look like humans, says Cambridge University evolution expert

Forget little green men

Leading evolutionary biologist says aliens will look like humans
The Real Stories of Migrant Britain: An Algerian scientist adjusts to life working in a kebab shop

The Real Stories of Migrant Britain

An Algerian scientist struggles to adjust to her new life working in a Scottish kebab shop
Bodyworlds museum: Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy

Dying dream of Doctor Death

Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy
UK heatwave: Temperature reaches 39.8 degrees on Central Line - the sweatiest place in London

39.8 degrees recorded on Tube

There's hot (London) and too damn hot (the Underground). Simon Usborne braved the Central line to discover what its passengers suffer
Kitchens go hi-tech: From robot chefs to recipe-shopping apps, computerised cooking is coming

Computerised cooking is coming

From apps that automatically make shopping lists from your recipe books to smart ovens and robot chefs, Kevin Maney rounds up innovations to make your mouth water
Jessie Cave interview: The Harry Potter star has published a feminist collection of cartoons

Jessie Cave's feminist cartoons

The Harry Potter star tells Alice Jones how a one-night stand changed her life
Football Beyond Borders: Even the most distruptive pupils score at homework club

Education: Football Beyond Borders

Add football to an after-school homework club, and even the naughtiest boys can score
10 best barbecue books

Fire up the barbie: 10 best barbecue books

We've got Bibles to get you grilling and smoking like a true south American pro
Wimbledon 2015: Nick Bollettieri - Junk balls and chop and slice are only way 5ft 1in Kurumi Nara can live with Petra Kvitova’s power

Nick Bollettieri's Wimbledon Files

Junk balls and chop and slice are only way 5ft 1in Kurumi Nara can live with Petra Kvitova’s power
Ron Dennis exclusive: ‘This is one of the best McLaren teams ever – we are going to do it’

‘This is one of the best McLaren teams ever – we are going to do it’

Ron Dennis shrugs off a poor start to the season in an exclusive interview, and says the glory days will come back
Seifeddine Rezgui: What motivated a shy student to kill 38 holidaymakers in Tunisia?

Making of a killer

What motivated a shy student to kill 38 holidaymakers in Tunisia?
UK Heatwave: Temperatures on the tube are going to exceed the legal limit for transporting cattle

Just when you thought your commute couldn't get any worse...

Heatwave will see temperatures on the Tube exceed legal limit for transporting cattle
Exclusive - The Real Stories of Migrant Britain: Swapping Bucharest for London

The Real Stories of Migrant Britain

Meet the man who swapped Romania for the UK in a bid to provide for his family, only to discover that the home he left behind wasn't quite what it seemed
Cheaper energy on the way, but it's not all sunshine and rainbows

Cheaper energy on the way, but it's not all sunshine and rainbows

Solar power will help bring down electricity prices over the next five years, according to a new report. But it’s cheap imports of ‘dirty power’ that will lower them the most