PARIS — Growth in continental China continues to power one of Europe’s luxury goods powerhouses — and Europe’s not far behind.
Hermès International on Friday reported an 8.9 percent rise in second-quarter sales, lifted by growth in Asia, and said it confirms an “ambitious goal for revenue growth” despite a backdrop of geopolitical uncertainties.
The maker of Birkin handbags and silk scarves said that sales in the period totaled 1.36 billion euros, with Asia posting the fastest growth, up 11.5 percent.
Hermès also said that it expects operating profitability for the first half of the year to come close to the level of last year, when it hit a historical high. Those figures will be reported on Sept. 14.
The quarterly sales figure was “bang in-line” with analyst expectations, said Rogerio Fujimori, analyst with RBC Capital Markets in a research note.
Europe outside of France was the second fastest-growing region over the second quarter, with sales up 10.9 percent, boosted by store openings and expansions in recent months in Rome, London and Munich.
Revenues in the company’s home market, France, inched up 0.6 percent, a performance characterized as weak by Luca Solca, luxury sector analyst with Exane BNP Paribas.
The Americas posted a 6.4 percent rise, in an environment the company said was “still contrasting.”
Luxury companies have been struggling to improve business in the region, which is being weighed down by political uncertainty and floundering department stores. Bain & Company forecasts the sector’s performance for the year in the Americas to range between stagnation and a 2 percent drop.
The company’s leather goods and saddlery division, which accounted for over half of the group’s sales last year, clocked sales growth of 10.5 percent to 708.1 million euros in the second quarter.
Hermès pointed to a “sustained pace of production” as supporting the division’s growth over the first six months of the year.
Hermès added two new French production sites in June and increased capacity at three other sites in the country since the beginning of the year, it said Friday.
An ongoing ramp-up in manufacturing capacity at Hermès, which counts 15 sites in France, has led some to wonder if this will make it easier to score some of the company’s highly coveted bags.
Hermès has built a reputation over the years of outgunning luxury rivals thanks in part to robust demand for its Birkin and Kelly models — evident in waiting lists and record prices for vintage bags.
A Christie’s transaction in Hong Kong last May topped the world record for the most expensive handbag ever sold at auction: $379,261 for a matte white Himalaya diamond Birkin bag made from Niloticus crocodile skin.
Some analysts consider secondary markets as an indication of a brand’s vitality, including Arnaud Cadart of CM-CIC.
“It’s the sign of a brand that functions very well,” said Cadart, noting an uptick in secondary sales of Hermès products over the past two years. A market cropped up for buyers too spooked by terrorism to make a trip to Paris but still eager to make the purchase, Cadart explains.
Jane Angert, who is in the business of hunting down high-end Hermès bags for some of the world’s most zealous collectors, said she beat the Christie’s record auction, brokering the sale of another Birkin bag for over $450,000. She declined to reveal details of the deal because of nondisclosure agreements.
Luxury bags are prevalent online, acknowledges Angert, who has made a name for herself by ferreting out some of the more scarce handbags through her business JaneFinds. She describes her market as falling into two separate classes: highly unique pieces and the more standard Birkin and Kelly bags that remain in constant demand.
Sales of Hermès fashion accessories and ready-to-wear products, which include clothing hats and shoes, grew the fastest, up 13.5 percent over the quarter.
Sales of watches climbed 4.1 percent, an upturn from the previous quarter.
Two divisions posted a decline in sales over the quarter. Perfumes slipped 2.1 percent and the division that lumps together activities that do not fall under the Hermès brand, including shoemaker John Lobb shoemaker and tableware brand Puiforcat, posted a 5.6 percent decline.
LVMH is due to report its first-half results on July 26, with Kering to follow on July 27.