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.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast