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.

The figures include an exceptional gain of 9.2 million euros, or $12.6 million, from the disposal of bonds in Leica Camera AG.

Meanwhile, Dillard’s Inc. said it would continue to close stores and tweak its merchandise mix after lackluster sales led to a 69.5 percent drop in fourth-quarter earnings.

“We simply did not achieve the level of sales necessary to produce more acceptable results,” said chief executive officer William Dillard 2nd.

Profits for the three months ended Feb. 2 fell to $47.3 million, or 63 cents a diluted share, compared with $155 million, or $1.90, a year ago. Sales decreased 9.5 percent to $2.21 billion from $2.44 billion.

Hermès said it would continue to expand its production capacity and store network this year, opening or renovating some 40 branches, with a particular emphasis on fast-growing China.

Operating profits in 2007 increased 2.1 percent to 423.7 million euros, or $580.8 million, from 415.2 million euros, or $521.6 million, a year ago on a sales rise of 7.3 percent to 1.63 billion euros, or $2.38 billion.

Dollar figures are converted from euros at average exchange rates for the corresponding periods.

As for the U.S. department store group, the Dillard’s ceo said, “We remain committed to strengthening our appeal to aspirational and contemporary shoppers to set Dillard’s apart in the marketplace.”

Dillard’s has been increasing its focus on exclusive merchandise, which accounted for 24.2 percent of its offering last year, up from 23.8 percent the year before.

The firm has already said it would close a distribution center and three stores. Additional underperforming stores will be closed “where appropriate” and the company plans to continue to buy its own stock, after picking up $111.6 million worth of its shares last year.

For all of last year, profits fell 78.1 percent to $53.8 million, or 68 cents a diluted share, on a 5.6 percent drop in sales to $7.37 billion. Special items for the year included a 14 cent hurricane recovery gain, a 15 cent tax benefit and a 16 cent charge for store closings and asset impairment.

For complete coverage, see Friday’s issue of WWD.