Hermes sales up most in 4 years on China demand

GENEVA • Hermes International reported its fastest quarterly sales growth in more than four years, buoyed by demand from Chinese consumers, another sign that the world’s largest luxury market is holding up.

The French maker of the famed Birkin bag reported a sales growth of 12% at constant exchange rates yesterday, managing to beat analysts’ estimates.

The stock, which has gained 27% this year, briefly touched a record in Paris trading yesterday and then ceded those gains.

“This is a rock solid start to the year,” wrote Rogerio Fujimori, an analyst at RBC Europe.

Hermes is stepping up into a higher gear as China’s economy rebounds.

That’s good news for the maker of US$1,250 (RM5,175) Epsom calfskin mobile phone cases and US$1,675 beach pants.

Concern had been rising since the end of last year that wealthy Chinese consumers were pulling back on spending, although recent results from luxury rivals LVMH Moët Hennessy Louis Vuitton SE and Kering SA indicate that hasn’t happened yet.

Hermes said its growth rate in greater China exceeded 10%.

Luxury-goods makers are becoming increasingly more dependent on that country as European markets like France decline in relative importance.

Hermes got 13% of its revenue from its home market last year, down from 20% a decade earlier. — Bloomberg