Hermes Gains as CEO Says Sales Withstand Weakening World Economy
Hermes International (RMS) SCA, the French maker of luxury scarves and bags, rose in Paris trading after saying it has yet to be affected by the weakening world economy.
Sales were “very good” in August and “September seems to be good as well,” Chief Executive Officer Patrick Thomas said yesterday in an interview before Hermes’s spring/summer 2013 women’s fashion show in Paris, where the company is based.
Hermes shares gained as much as 1.4 percent and were up 1.2 percent at 211.55 euros as of 10:01 a.m.
Luxury-goods makers have reported divergent sales trends since the end of August. Burberry Group Plc (BRBY), the U.K.’s largest luxury-goods maker, this month partly attributed a decline in same-store sales to an industry-wide slump in spending, rattling the stocks of rivals. Prada SpA said last week that demand is “still holding.”
Hermes has a backlog of bag orders, which “may be a reason why we haven’t seen anything yet,” Thomas said. Hermes’s Birkin handbags sell at prices starting at 5,500 euros ($7,073).
Third-party watch sales seem to be slowing, including in China, though demand for timepieces in Hermes’s own stores hasn’t decelerated, Thomas said.
The so-called absolute luxury segment, or most exclusive, where Hermes competes, is the fastest-growing part of the market and will keep outperforming the rest until at least 2014, Bain & Co. has predicted. Hermes said last month that 2012 sales, excluding currency shifts, may grow about 12 percent.
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