Agenda-setting intelligence, analysis and advice for the global fashion community.
PARIS, France — Hermès International SCA, the French maker of Birkin bags and silk ties, reported a 8.9 percent increase in 2013 earnings as it sold more high-margin clothing and accessories.
Operating profit rose to 1.22 billion euros ($1.69 billion), the Paris-based company said today in a statement before European markets opened. Analysts predicted the same amount, according to the average of 12 estimates compiled by Bloomberg. The operating margin widened to a record 32.4 percent.
Hermès is weathering a slowdown in luxury-goods consumption better than many of its peers as production constraints and controlled distribution reinforce its elitist appeal. The company, which added 900 jobs last year, has said it plans to create two new leather goods premises in France to help catch up with demand that remains very high.
“Hermès will continue its long-term strategy” which includes expanding its distribution network and protecting its supply sources, the company said in today’s statement.
ADVERTISEMENT
Hermès shares rose 1.2 percent to 237.5 euros yesterday in Paris. The stock has fallen 9.9 percent this year, valuing the saddle-maker part-owned by billionaire Bernard Arnault's LVMH Moet Hennessy Louis Vuitton SA at 25.1 billion euros.
Full-year sales reached 3.75 billion euros, led by non- Japan Asia and America, Hermès said Feb. 13. The company said at the time that 2013 profitability was probably slightly above 2012’s record 32.1 percent.
Net income increased 6.8 percent to 790 million euros, Hermès said today.
By: Andrew Roberts
