PARIS — Like the mythical postal carrier inured to challenging weather, Hermès International has yet to be held back by the dark clouds of economic uncertainty.
“We haven’t noticed any erosion of consumer demand,” chief executive officer Patrick Thomas told WWD Thursday as Hermès reported that sales in the second-quarter advanced 21.9 percent, matching its performance in the first three months of the year.
Stripping out the impact of currency fluctuations, sales in the period rose 13.4 percent to 814.5 million euros, or $1.05 billion. That’s under the 17.6 percent gain at constant rates in the first quarter.
But Thomas said the apparent slowdown was mainly due to extraordinary events in 2011, when Hermès acquired its concession in Russia and launched the fragrance Un Jardin sur le Toit.
He said trends in July remain “more or less the same” as the first half. “I am moderatelyoptimistic.”
The executive acknowledged there are potholes down the road for the luxury sector. Hermès faces a less-favorable-currency environment ahead and rising raw material costs, notably for silver, gold, textiles and certain leathers.
Thomas also cautioned that domestic demand is withering in France, where the new Socialist government of François Hollande has vowed to extract more tax revenues from the rich, a client strata upon which Hermès relies.
In the second quarter, sales at constant exchange grew 6.8 percent in France, trailing a gain of 8.2 percent in the Americas, 16.4 percent in the rest of Europe and 26.9 percent in Asia-Pacific. Sales in Japan retreated 1.1 percent.
Despite headlines warning of slowing growth in China, Thomas said Hermès has detected no change in surging demand from Chinese clients, particularly in Europe.
Encouraged by its sales performance in the first half, the company said it stands by its target for consolidated revenue growth of 10 percent for the full year.
“For the moment, there’s no sign of any decrease in the growth rate, so we may be slightly above our target,” Thomas said.
Hermès reported revenues only and will publish profits on Aug. 31. The company expects recurring operating income to increase in line with revenues, and the underlying operating margin to fall between 2010 levels and the record high achieved last year.
All product categories logged gains in the second quarter. At constant exchange rates, sales advanced 3.6 percent for tableware, 5.4 percent for perfumes, 7.4 percent for leather goods and saddlery, 15.8 percent for silk and textiles, 19.3 percent for watches and 22 percent for ready-to-wear and fashion accessories.
Thomas noted that demand for leather goods continues to outstrip the output of its workrooms, and the increase “reflects only our growth in production capacity.”
Hermès plans to open one new boutique in the second half, in Wuhan, China, while renovating and expanding 11 existing units to better display its full product lines, including an expanded range of home wares such as wallpaper.
Revenues in the first half rose 21.9 percent to 1.59 billion euros, or $2.07 billion. All dollar rates are calculated at average exchange for the periods to which they refer.
In the first half, Hermès benefited from a favorable currency environment, which had a positive impact of 85 million euros, or $110.3 million, the company noted.
A troubled economic outlook and anemic consumer demand, particularly in Europe, looms over the first-half reporting season — and threatens to put a dent in luxury’s long, strong run.
“What he has done at Vuitton is really exceptional,” said @gameofthrones’ actress Gwendoline Christie on @mrkimjones’ final show for @louisvuitton. “He has rebooted luxury in terms of making it commercial, viable and contemporary. And most importantly artistic. He has never compromised his artistic vision for the sake of commodity.” (📷: @zefashioninsider)
After seeing a demand for men’s wear from its customers, British contemporary women’s wear label @ariesarise has added a men’s wear component and will launch a unisex collection with @mrporterlive. The 20-piece collection includes jackets, denim, logo T-shirts and more with deconstructed ‘90s vibes. Set to launch on January 18, you can shop the pieces on Aries’ website and on mrporter.com. #wwdfashion
“And so spending so much time with a character who thinks like that, inevitability you try and analyze yourself and go back and think about your own demons and dark chapters that you had in your life,” says @thedanielbruhl of his role in TNT’s “The Alienist.” The show, set in the Gilded Age of New York, also stars Dakota Fanning and Luke Evans. Head to WWD.com to read about how 39-year-old Brühl prepared for the role and why he thinks the show is so relevant to today #wwdeye ( 📷: @Eriktanner)
Now that Celine Dion’s collection has topped $10 million in sales, the pop superstar, fashion icon and newly-minted industry player is eyeing growth in Asia. Read the full report by @tiffanyap, link in bio. #wwdnews #celinedion
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
Among the familiar faces at @off____white’s show was a surprise figure: Japanese artist @takashipom, pictured here on Wednesday morning. Other show-goers included @jerrylorenzo, who spoke about his upcoming project: a @nike collaboration for back to school, with designs inspired by his childhood on the West Coast. Sitting in the front row were Future, Don Crawley, @miguel and more. See the rest of the photos on WWD.com #wwdeye (📷: Stephane Feugere)
According to @laurentsai, former “Terrace House: Aloha State” cast member, she didn’t know she was auditioning for the Japanese version of “Real World.” “I was telling a couple of my friends and someone’s like, ‘That sounds a lot like Terrace House.’ I was like, ’No it can’t be.’” Turns out, it was. But Tsai isn’t just a reality star — she’s an illustrator who has worked with Starbucks Japan and most recently, she’s dipping her toes into the fashion world. Head to WWD.com to read about her time on the show, modeling and her art. #wwdeye (📷: @danieldorsa)
More changes are coming to New York Fashion Week: Beginning with the spring 2019 collection, @alexanderwangny will move his New York show to June from September, adopting a biannual schedule with collections shown in June and December. Additionally, the @cfda is planning for an official summer/winter fashion season taking place as soon as June and December 2018. Read more about the upcoming changes on WWD.com. #wwdnews #wwdfashion (📷: @slovekinpics)