Tuesday , September 21 2021

Hermes did not see a decline in Chinese sales

Hermes France today reported a strong third-quarter sales momentum, with its leather goods division performing well.

The maker of luxury Birkin bags also played down fears of a slowdown in China.

Luxury goods companies have been the subject of investor fear of a potential slowdown in Chinese spending – which accounts for one third of industrial sales – as a smoldering trade war with the US.

Hermes joins rivals including Gucci Dry owners in an upbeat tone in China, however, saying such concerns are unfounded for now.

"We don't see a change in pace at this stage," said chief executive Axel Dumas told reporters, adding that the company "read a lot" about concerns about Chinese consumers and had discussed them internally.

Demand from Chinese tourists who waste luxury goods abroad is also solid, although the client segment is more vulnerable to currency fluctuations, Dumas said.

Company revenues came in at € 1.46 billion in the three months from July to September, up 9.7% from a year ago in a constant currency.

That marked a slowdown from 11.6% comparable growth from the previous quarter, partly because of weaker performance in the Hermes silk scarf division after a difficult last year's comparison.

But revenue was a touch ahead of analyst expectations as sales increased in a division that housed bags and items such as saddles.

Hermes shares have lost more than 17% of their value since its peak in late June, although they are still up nearly 15% so far this year.

Like rivals including LVMH Louis Vuitton and Gucci, Hermes is one of the biggest beneficiaries of a lucrative industrial background over the past three years.

It has long been cultivated as follows for exclusive Birkin and Kelly leather bags that can cost more than $ 10,000 and also encourage online sales with more intermediate products.

It launched e-commerce operations in China in October.

Source link