HERMES EARNINGS JUMP 15.3%

Byline: Miles Socha

PARIS — Despite a 5 percent slowdown in U.S. sales, high-flying Hermes International saw its net income in 2001 leap 15.3 percent to $177.5 million, up from $154 million in 2000.
The luxury firm said Wednesday that operating profits rose 6 percent to $270.2 million in 2001, up from $255.2 million a year ago. Dollar figures are converted from euros at current exchange rates. Net margins rose by 1.3 points to 16.4 percent of sales. Operating margins were on par with a year ago: 25 percent of sales.
As reported, Hermes’ sales advanced 6 percent last year to $1.1 billion, headlined by a 23 percent rise in Japanese revenues and a 13 percent gain in watch sales.
Last year, Hermes invested $125 million to expand its store network by 12 locations, modernize its production facilities and buy the remaining 10 percent stake in its Japanese subsidiary it didn’t already own. The company said all activities were financed from cash flow, which totalled $212.8 million last year. Projects for 2002 include opening seven new stores and increasing production capacity for leather goods, silks and tableware.
At its annual shareholders’ meeting June 3, the assembly will be asked to approve a dividend of $1.32 per share, excluding tax credit.
Hermes also noted that its workforce grew by almost 300 to reach 4,943 last year.
Shares in Hermes gained 1.9 percent Wednesday to close at $156.11 on the Paris Bourse.

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