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Hermes says Q1 sales gain 10.3% but leather goods sag

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(Globalpost/GlobalPost)

French luxury fashion group Hermes, known for its elegant silk foulards and exclusive handbags, on Monday said its first-quarter sales gained 10.3 percent thanks to a surge in demand especially by Asian shoppers, but noted weaker growth in sales of its iconic leather goods.

While overall sales came to 856.8 million euros ($1.1 billion), the Paris-based fashion house said in a statement that it saw a 17 percent jump in Asian countries excluding Japan, where they were 7.0 percent stronger.

Asian fashionistas, and particularly Chinese, have grown increasingly fond of the traditional French brand which is profiting from an influx of tourists who snap up luxury goods while visiting Europe.

In Europe, Hermes said it had benefited from a 12.0 percent jump in sales, "despite a very high basis of comparison and a dull economic climate."

In the Americas, sales gained 11.0 percent, it added.

The overall gain of 10.3 percent was significantly less than the 2012 first quarter expansion of 18.5 percent, but Hermes posted a better figure this time around than French rival LVMH, where comparable sales were up by 7.0 percent.

"Everywhere demand for Hermes collections remains strong, favoured by a growing requirement for quality, personality and timelessness of objects and clothes," the statement said.

Hermes had record results in 2012, with sales of 3.48 billion euros and a net profit of 740 million.

In the first quarter of 2013, the Leather Goods and Saddlery division posted organic growth of 7.0 percent from the same period a year earlier, but that was less than half the comparable rate in the final quarter of 2012.

Growth in sales of Silk & Textiles, the group's scarf division, was 15 percent, in large part owing to ramped up production capacity.

Ready-to-wear and Accessories reported a sales jump of 18 percent, meanwhile, the same level of increase in the group's perfume unit where the company said its new female "Jour d'Hermes" fragrance "was greeted with very promising enthusiasm".

Hermes did not give a detailed financial outlook for 2013 as a whole, saying only that it would expand its distribution network, strengthen its production capacity and protect its sources of supply.

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HERMES INTERNATIONAL

http://www.globalpost.com/dispatch/news/afp/130422/hermes-says-q1-sales-gain-103-leather-goods-sag-0