Hermes lifted by new surge in handbag sales

FRENCH luxury goods group Hermes posted a 55 per cent rise in first-half pre-tax profit, boosted by leather goods, and slightly raised its financial targets for the full-year yesterday.

Pre-tax profit rose to €194.6m (£160m) in the first six months of the year.

Hermes, known for its printed silks and leather handbags, said it expected its full-year operating margin to improve by at least one percentage point, whilst sales at constant exchange rates could rise 12 per cent.

Handbag sales, particularly in Asia, helped to fuel the profit jump.
Hermes last month raised its full-year sales growth target to 10 to 12 per cent from five per cent after second-quarter sales beat its own expectations and predicted a one point rise in its margin.

The luxury goods industry, whose revenues fell eight per cent last year according to US consultants Bain & Co, is crawling out of its worst downturn in decades, buoyed by travelling shoppers from emerging markets.