Hermes can't keep up with bag demand
07/05/2009
French luxury goods brand Hermes International has announced a 3.2% rise in first-quarter sales.
The Paris-based company said "persistently brisk" demand for its leather bags, as well as changes in the currency markets, had been one of the main reasons for the growth. The company has said that demand for its bags and other leathergoods is greater than its capacity to produce them.
Revenues for the quarter reached $570 million.
Hermes International has said that, in some parts of the world, such as Asia, customers sometimes have to wait for as long as three years for delivery on certain bag models.
Reuters reported that leathergoods were the only products to see any sales growth during the first quarter. Revenue from this area rose by 10.2% at constant exchange rates and 21.7% at current rates.
The sharpest downturn was in its perfumes (down by 30%), watches (down by 35.7%) and tableware categories.
The company said it planned to continue to invest in the expansion of its distribution network and would open or renovate more than 20 stores in 2009, mainly in Asia and the US.
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