Hermes hammered: Growth hit by weak demand in Japan

FRENCH luxury goods maker Hermes has suffered a slowdown in second-quarter sales growth, hit by a slump in Japanese demand and adverse changes in foreign exchange rates.

A model presents a creation for Hermes during the 2014/2015 Autumn/Winter ready-to-wear collection fashion show. Picture: Getty

Revenue growth at the firm, known for its Kelly leather bags and printed silk scarves, slid to 5.8 per cent, from 10.1 per cent in the first quarter.

Sales growth in Japan, one of the group’s biggest markets, slowed to 1.6 per cent from 21.7 per cent in the previous three-month period, when trading was boosted by price increases and advanced purchases ahead of a sales tax rise on 1 April.

However, chief executive Axel Dumas said he expected overall sales growth at constant currencies in Japan to reach 7 per cent this year, against 6.5 per cent last year.

Overall, second-quarter revenue reached €963.4 million (£762.9m) in the three months to 30 June 30, up from €943.5m previously.

Tourist spending in Europe remained soft but Hermes did not see a sales drop in Hong Kong, where officials plan to limit the number of visitors from mainland China.