HERMES NET UP 21.1% IN 1ST HALF
PARIS — Hermes International reported Wednesday that net profits for the for the first half rose 21.1 percent to $32.1 million (195.5 million francs) at current exchange.
Those profits came on first-half sales of $358.5 million (2.19 billion francs), up 14.2 percent from a year ago.
Operating profits were up even more. They rose 29.9 percent to $60 million (365.9 million), thanks to lower spending on advertising, while at the same time maintaining margins. Last year Hermes spent heavily on the launch of its 24, Faubourg fragrance.
Currency shifts, notably the strengthening of the dollar, had a positive effect on the half, the company noted. At constant exchange rates, the rise in turnover would have been 11.6 percent and net profits up 10.1 percent. Operating profits would have increased 18.8 percent.
Sales of ready-to-wear and leather goods registered a 26 percent rise. For rtw, this is due to the success of the men’s and women’s collections for this past spring-summer season. Leather goods did well because of increased production capacities, the company reported.
However, fragrance sales dropped 10 percent, primarily because the launch of 24, Faubourg in Asia and the U.S. pushed up last year’s sales.
Compared to the first half 1996, sales of silk products were practically stable because of a yen/dollar parity that caused a slowdown of tourists in the Pacific Rim and Hawaii.