Paris (AFP) – Sales by French luxury group Hermes, known for its silk scarves and leather handbags, defied US tariffs and a weak dollar to rise in the third quarter. The company, which makes the iconic Birkin bag, said sales growth in the United States accelerated slightly in the third quarter by 7.2 percent to 714 million euros ($829 million).
“In the Americas we had a very good third quarter, in particular in the United States with growth driven by all product lines,” said chief financial officer Eric du Halgouet. Hermes said earlier this year that it hoped to avoid raising prices in the United States further despite the new 15 percent tariff on goods from the EU, but warned the weak dollar was also weighing on performance. The gain in sales would have been 14.1 percent had the dollar not fallen.
Halgouet said Hermes had kept prices steady since the EU-US tariff deal in July. “We’ll continue to invest in this strategic market,” he said, noting the opening of a new store in Nashville, Tennessee, earlier this month. Overall, the company’s third quarter sales rose by five percent to 3.9 billion euros. That puts it ahead of the world’s biggest luxury group LVMH, which reported last week that its third-quarter revenue dropped four percent due to adverse currency movements.
In China, the key market for luxury firms where sales have recently faced headwinds, Hermes posted flat third quarter revenues. The company’s share price dropped 4.7 percent in morning trading in Paris. Hermes expressed confidence in the medium-term outlook. “Despite the economic, geopolitical and monetary uncertainties around the world, the group confirms an ambitious goal for revenue growth at constant exchange rates,” it said in a statement.
Hermes announced Tuesday that British designer Grace Wales Bonner would be taking over its men’s pret-a-porter collection from Veronique Nichanian, who has held the position for nearly four decades. The new blood at Hermes is just the latest in a series of artistic changes at the big fashion houses, notably at Chanel, Dior, Balenciaga, Loewe, and Jean Paul Gaultier.
The luxury sector is currently going through a challenging period for sales globally that is impacting many companies, but Hermes has been well-protected from the buffeting. Over the first nine months of the year, Hermes has seen its sales rise by 6.3 percent to 11.9 billion euros.
© 2024 AFP
