Chinese demand boosts Birkin bag maker Hermès’ sales as Asian appetite for luxury goods grows
French brand known for high fashion leather goods and silk scarves says sales from April to June rose 14.7 per cent to US$1.87 billion
Surging demand in Asia – especially in mainland China – helped Birkin handbag maker Hermès post better-than-expected sales growth for this year’s second quarter, in an encouraging signal for some of its major luxury goods rivals.
The industry has so far largely shrugged off any fallout from a Beijing-Washington trade war that could potentially hit consumer sentiment in its two biggest markets, with appetite for branded goods if anything picking up among Chinese shoppers.
Hermès said sales in continental China, where it recently revamped its e-commerce website, were particularly strong during the first half of 2019
Hermès – along with Louis Vuitton owner LVMH and Gucci parent Kering, which are also expected to report results this week – has been one of the big beneficiaries of this benign backdrop.
The French high fashion luxury goods maker, best known for its pricey leather goods and squared silk scarves, said sales for the April to June period rose 14.7 per cent on a reported basis to €1.67 billion (US$1.87 billion), and were up 12.3 per cent at stable exchange rates.
That marked a pickup from the 11.6 per cent comparable sales growth in the previous quarter when several analysts had expected a slightly more muted performance, citing a tougher comparison base.
Revenues expanded at a brisk pace across Asia, accelerating from the quarter before despite the political protests in Hong Kong, which is a big regional shopping destination.
Hermès finance chief Eric du Halgouet told reporters the company had to close two of its Hong Kong stores at certain points in June because of the pro-democracy demonstrations, but that the drag on sales was only minor.
Chinese shoppers, who make up more than a third of the luxury goods industry’s client base, have been increasingly spending at home rather than overseas, encouraged by government measures such as import tariff cuts
Chinese shoppers, who make up more than a third of the luxury goods industry’s client base, have been increasingly spending at home rather than overseas, encouraged by government measures such as import tariff cuts.