Profits in the bag for Hermès as Asia's passion for luxury fashion returns in style
Saturday 31 August 2013
The high-end French handbag maker Hermès posted another forecast-beating set of figures as the global desire for £6,000 handbags and silk scarves failed to wane.
The maker of Birkin and Kelly handbags reported a 14 per cent rise in first-half operating profit to €584.1m (£498.8m).
The group also said the strong first half could mean its 2013 full-year profit, as a percentage of sales, will beat last-year's record 32.1 per cent.
Concerns about a sales-growth slowdown in China have abated as Hermès reported a resilient performance there with around a third of its business now coming from Asia, excluding Japan.
Signs of sales growth across Asia for the luxury-goods sector was also supported by results from Italian luxury group Salvatore Ferragamo which reported an 80 per cent jump in first-half net profit on Thursday.
Hermès has tended to outperform other luxury rivals mainly due to the fact its handbags are rationed via a waiting list.
The company said: "Demand for Hermès products remains strong," and bag-sales growth was constrained by manufacturing capacity. It is in the process of opening two new factories in France to increase production.
The Paris-based uber-luxury group, which makes bags that sell for up to £30,000, has been expanding into clothing which has also been performing well. Sales for the six months to July came in at €1.77bn and net profit was €381.7m.
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