Europe’s financial crisis doesn’t seem to have hit Hermes International. The French brand reports its first quarter sales rose by almost 22%, buoyed by strong demand in Asia, Europe, and the Americas.
Its sales rose to 21.9%, or the equivalent of 776.9 million euros, for the quarter ending March 21. That’s well up on fashion forecasters’ estimates of 741.8 million euros.
Hermes also enjoyed double-digit sales increases in all global regions, led by a 22% boost in Greater Asia and 21% increase in Europe.
Despite the good news the company is remaining cautious, with predictions Europe’s shaky economy will result in lower sales for the rest of 2012. It’s keeping its sales growth target between 10 and 11 %, and relying on strong demand in China to achieve those figures. The Asian country’s desire for Hermes goods regularly outpaces its production capacity, but Hermes chief executive officer Patrick Thomas said this problem should be resolved by year’s end. Unfortunately though, if this issue takes the remainder of 2012 to sort out all important sales figures will suffer.
As a sign of its restraint in uncertain times, Hermes is also slowing its expansion. It opened 13 new stores in 2011, but this year promises just three. These are strategically placed in China, Taiwan, and Abu Dhabi to take advantage of the regions’ growing tastes for luxury goods.
Do you think Hermes can rise above its continent’s money woes?
