Luxury goods brand Hermès defies gloom

The French luxury goods brand Hermès posted a set of credit-crunch-defying revenues for its second quarter yesterday, boosted by soaring sales of its trademark leather goods, silk and perfumes.

City analysts said that Hermès, which is famous for its pricey handbags and ties, is also benefiting from its global presence, which shelters it from weaker retail markets, such as the US and Italy.

The positive results mirror the stellar performance of other global luxury brands, such as PPR, Richemont, LVMH and Burberry, whose well-heeled customers continue to splash the cash, despite the global credit crisis and soaring cost of living.

For the three months to July, Hermès grew sales to €398.1m (£315.7m) at constant exchange rates, which was slightly ahead of analyst forecasts, from €355m for the same period a year earlier. Hermès saw sales of leather goods and saddlery jumped by 17.1 per cent to €170.8m, driven by strong sales of handbags, of which some cost at least €4,000.

Sales of perfume, which include Bel Ami and the newly launched Kelly Caleche, soared 28.2 per cent to €32.3m, while silk and textiles sales rose 11.2 per cent to €41.3m.

Hermès, which has seven UK stores, racked up strong sales in Europe, the Americas and Asia, excluding Japan. But in Japan sales "were less buoyant" and dipped 2 per cent, said Hermès.

Bernstein analyst Luca Solca said: "Companies that have broader international exposure are doing better. Hermès is continuing with their usual strategy of being relatively high on price and this is going down quite well."

During the second half of its financial year, Hermès plans to open or renovate 15 branches, which will be mainly in Europe and Asia.