Paris: French luxury goods maker Hermes posted first-quarter sales ahead of forecasts, driven by strong demand for its silks, accessories and ready-to-wear. The maker of €13,000 Birkin leather bags and €400 printed silk scarves said on Monday watch sales fell 5 per cent during the period, hit by a slowdown in the Chinese market.
Hermes made revenue of €856.8 million ($1.12 billion) in the three months to March 31, up 12.8 per cent at constant currencies, topping analysts’ expectations of 11 per cent.
Leather sales growth slowed in the first quarter to 7 per cent from 15 per cent in the fourth quarter last year but Hermes said production capacity, which held up sales in the past, would “increase steadily” in 2013.
Hermes’s overall performance marked a slowdown against the same period last year which saw growth of 17.6 per cent.
Comparatively, growth at archrival LVMH’s fashion and leather unit came in at 3 per cent in the first quarter at constant currencies, against sales growth of 14 per cent last year.
“We look forward to understanding the reasons of a relatively low performance of leather goods,” said Bernstein analysts in a note to clients about Hermes’ figures.