Hermes posts record profit in 2012
Luxury fashion group Hermes, known for silk scarves and handbags, reported on Thursday a record profit for 2012, confirming a stellar performance for France's luxury industry as a whole last year.
Net profit last year soared 24.5 percent to 740 million euros ($954 million), well above an analyst expectation of between 710 to 720 million euros.
Operating profit during the 12-month period rose by 26.4 percent to 1.12 billion euros when analysts had been expecting 1.09 million.
The company's operating margin ended the year at 32.1 percent and was the highest since Hermes, founded in 1837, went public in 1993.
In February Hermes, whick makes the signature Kelly and Birkin bags, reported a 22.6-percent rise in sales last year to 3.48 billion euros ($4.66 billion).
The sales figure exceeded expectations by analysts who had foreseen a figure of about 3.42 billion euros.
Sales were boosted by activity in Asia where the company does most of its business and where it opened two new outlets, one in Taiwan and one in China. Hermes also enlarged six other outlets.
Sales in Asia rose by 28.6 percent and, excluding Japan, they rose by 36.2 percent, notably owing to demand in China.
In America, where the sales network was increased, sales rose by 22.5 percent.
The company said that it was optimistic about the outlook for 2013 but did not make any forecasts.
Sales at the company have doubled since 2008.
Last month, French luxury rivals LVMH and PPR also posted bumper profits for 2012.
Hermes and LVMH are locked in a bitter legal battle.
Since 2010, LVMH has slowly built up its stake in Hermes, despite bitter protests by the still family-dominated company. By the end of May 2012, the LVMH share of Hermes stood at 22 percent.
Resisting what it calls a hostile takeover by LVMH, Hermes has filed a legal complaint over the LVMH share-buying spree.
LVMH owns a stable of luxury companies including Louis Vuitton, Givenchy and Moet and Chandon champagne.
© 2013 AFP