PARIS — Aided by disposals and accelerating sales in the second half of 2007, full-year net profits at Hermès International rose 7.3 percent to 288 million euros, or $394.8 million, from 268.4 million euros, or $337.2 million, a year ago.
"We had very good results from our growth engines: silk, men's ready-to-wear, fashion accessories and jewelry. This did boost the figures," said Patrick Thomas, chief executive officer at Hermès. "We are very pleased."
The results were "slightly better" than Hermès' projections and bested analysts' expectations.
Still, unfavorable exchange rates chopped 80 million euros, or $109.7 million, off full-year sales tallies, and wiped 44 million euros, or $60.3 million, from operating results. (Dollar figures are converted from euros at average exchange rates for the respective periods.)
Operating profits in 2007 improved 2.1 percent to 423.7 million euros, or $580.8 million, from 415.2 million euros, or $521.6 million, as sales increased 7.3 percent to 1.63 billion euros, or $2.38 billion. At constant exchange rates, the bump in operating profits stood at 14.5 percent.
The figures include an exceptional gain of 9.2 million euros, or $12.6 million, from the disposal of bonds in Leica Camera AG. The net margin remained steady at 17.7 percent of sales.
Given mounting economic woes in the U.S., Thomas said forecasting is becoming increasingly difficult. Hermès has set a sales growth target of around 10 percent at constant exchange for 2008.
Asked about recent trading, Thomas said, "The beginning of the year was good everywhere, including the U.S."
However, he cautioned it is "difficult to extrapolate" for the balance of the year given multiple uncertainties in the U.S. and a "challenging market in Japan," which accounted for 24 percent of Hermès sales last year. The Americas represented 15 percent of sales, France 20 percent, the rest of Europe 21 percent, Asia-Pacific 17 percent and other regions 3 percent.
Thomas said Hermès would continue expanding its production capacity and store network this year, opening 12 new branches. The locations are in San Diego and Santa Fe, N.M., in the United States, four stores in China, two in Macau and one each in Hong Kong, Seoul, Kobe in Japan and Delhi in India. Roughly 30 stores are slated for renovation.Last year, Hermès said investments in its factories and boutiques totaled 156 million euros, or $213.9 million.
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye