Hermès bags a record profit

Laura Chesters@LauraHChesters
Friday 22 March 2013 00:03

The maker of £10,000 Kelly and Birkin handbags has shrugged off fears of a slowdown in China by reporting record profit last year, driven by insatiable demand in Asia.

Über-luxury brand Hermès has reported its most profitable year; profit jumped 26.4 per cent to €1.12bn (£957m).

The Paris-based fashion house, which is fighting a legal claim against rival LVMH over stakebuilding in the company, said last month it expected to report record profitability for 2012 after strong, fourth-quarter sales.

The group, which keeps supply limited and creates waiting lists for its most-desired products, has also reported its best operating margin of 32.1 per cent.

Last year, some luxury brands reported slightly weaker sales growth in the key emerging market of China, but more recently demand appears to be improving.

Hermès reported Asian sales, excluding Japan which has become a mature market for the group, were up 25 per cent, while European sales growth was also strong, rising by 15 per cent.

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