10% sales growth in the third quarter and probably more work than expected throughout the year 2009. The news was good from the luxury house Hermes.
Cautious after a solid first half already, Hermes had forecast a stability of its annual sales and “a slight decline” in profit from it now figure about 5% decline in operating profit in 2009 , saying its sales target will be “slightly exceeded if the trend observed since the beginning of the year continues.
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The group that made its reputation on its products, leather upholstery and silk scarves saw its quarterly revenue increase to 452.1 million euros over the three summer months, against 410.5 million of ‘euros a year earlier. The performance is still some 86 million euros to a positive currency impact.
Organic growth accelerated to 4.8% while activity has increased in the group’s stores (18% after 9% in first half). Among wholesalers, sales have declined further (-13%) but to a lesser extent than in the first half (-22%).
Demand for Kelly bags and other leather goods to over 4,000 euro has not weakened the division had recorded a growth of 15.7% at constant exchange rates in the first half, it now displays under the third quarter growth of 17.2% (and almost 28% on published data) in a context of falling global luxury market. Silk scarves and fashion accessories have contributed to buoyant sales but in terms of other trades, turnover is down with “a higher decrease on the clock and tableware” whose sales are suffering from de-stocking distributors.
In the fourth quarter, Hermes will continue its investment to develop its distribution network with the key to opening or renovation of six branches, including a new store in Seattle, United States, one in Calgary, Canada and several projects Asia.
Tags: global luxury market, Hermès, Kelly bags, luxury house Hermes