Positive Q1 results for Hermes
7 May 2010Hermes, the French luxury brand, posted the largest surge in first-quarter sales of all European luxury goods companies on May 6, pointing to a continued polarisation of the market in which well-established brands crush weaker rivals. Hermes is particularly known for their high-end leathergoods and footwear.
The maker of euro15,000 ($20,100) crocodile skin handbags and silk scarves confirmed a rebound in the luxury goods market, particularly in the United States where sales rose 25% during the first quarter.
In Europe, a market highly dependent on tourists, Hermes revenue rose 15%, while in Asia, excluding Japan, it was up 47%.
Overall, Hermes sales in the three months to March 31 rose 18.5% to Euro 507.7 million, or 20.2% at constant currencies.
By comparison, like-for-like sales from fashion and leathergoods at luxury giant LVMH rose 10% in the first quarter, while at Gucci Group they were 6.1%. During Burberry's first-half, they rose 6%.
But looking ahead, Hermes chief executive, Patrick Thomas said he expected the company's growth rate to slow down during the year.
‘Towards the end of the year, we should see a slower growth rate than during the beginning of the year,’ Thomas told Reuters in an interview.
Thomas added that the company was ‘not very optimistic about 2010’ but confirmed its sales growth target of at least 5% and expectations of a slight increase in operating margin.
He said that one of Hermes's biggest markets, Japan, where sales fell 2% in the first quarter, would finish the year with a slight increase.
Responding to speculation earlier this week that family shareholders might sell some shares after ex-chairman and shareholder Jean-Louis Dumas passed away, Thomas said they still planned to hold on to their stakes.
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