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French luxury house Hermès added to the feel-good mood that’s sweeping the luxury sector when it announced on Thursday that like-for-like sales increased 11.2 per cent to €1.35bn in the first three months of the year.
“Despite the uncertain economic environment we did very well,” said chief executive Axel Dumas on a call. “All geographical areas have grown and we saw an acceleration of sales in mainland China, Hong Kong and Macau, which we have not seen for a while.”
The group which is best known for its silk scarves and Birkin handbags said that its home market of France, which has suffered from a decline in tourism because of terrorist attacks, grew slower than the rest of Europe.
Revenues in France increased 4.4 per cent on a like-for-like basis, while Europe excluding France was up 9.2 per cent. Mr Dumas said that tourists are favouring destinations like London and Milan over Paris.
Earlier this week the Arnaut family, controlling shareholder of LVMH, announced it is swapping out of its last Hermès shares as part of a wider corporate restructuring, ending a long-running battle between the two French houses.
Groupe Arnault is paying €12.1bn in cash and Hermès stock to buy out the minority shareholders in Christian Dior. Mr Dumas declined to comment on the transaction beyond saying that it has a favourable impact on the Hermès stock’s liquidity.
Leather goods and saddlery, the largest division at Hermès, grew 15 per cent during the quarter to €696m, thanks to the success of a range of handbag models including Constance, Verrou, Halzan and Lindy, as well as the brand’s iconic Birkin and Kelly models. The watches business line dropped 6 per cent, continuing to face a challenging market.
Mr Dumas said:
We remain quite cautious for the end of the year. More and more we’re in an uncertain environment.