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
ebooksA celebration of British elections
  • Get to the point
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

SThree: Trainee Recruitment Consultant - Swiss Banking and Finance

£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...

Ashdown Group: Marketing Executive - 6 month FTC - Central London

£25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...

Ashdown Group: Junior Project Manager (website, web application) - Agile

£215 per day: Ashdown Group: Junior Project Manager (website, web application ...

Guru Careers: Software Engineer / Software Developer

£40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before