Luxury goods company Hermes International (RMS.FR) Friday fueled hopes of a gradual return of luxury consumption, particularly for the industry’s most staid brands, reporting an 8.5% rise in 2009 revenue thanks an end-of-the-year surge in sales of hand-stitched handbags and silk scarves. Revenue for the year rose to EUR1.91 billion from EUR1.76 billion a year ago, beating expectations for EUR1.89 billion according to a FactSet survey, and easily topping the company’s previous target of flat sales.
At constant exchange rates, annual sales were up 4.1% and Hermes this year targets 5% sales growth this year, at constant rates.
“This objective may seem prudent, but the crisis won’t be erased in a week. Improvement will be gradual, I don’t expect a strong and immediate rebound,” Deputy Financial Director Lionel Martin-Guinard told analysts in a conference call Friday.
Luxury industry executives have timidly begun to express hope that the worst is over after the economic crisis brought years of heady growth to an abrupt end.
On the high-end of the sector, companies like Hermes were hit especially hard as consumption of expensive watches and jewelry dried up and third-party sellers of the goods struggled to sell existing stocks.
– from WSJ