Hermes revenue growth slows but weak sterling helps UK sale

The Birkin bag comes with a hefty price tag

French luxury brand Hermes was hit by slowing sales growth in June, but has continued to benefit from sterling’s devaluation in the UK.

The figures

In the three months to the end of June, sales reached €1.36bn (£1.22bn), rising 8.3 per cent on a like-for-like basis. This was compared to a sales growth of 11.2 per cent in the first three months of the year.

Like-for-like sales in the first half were up 9.7 per cent on the year before, reaching €2.7bn.

Sales in its leather goods division jumped 12 per cent, a rise the firm said was supported by the opening of two new factories in Saint-Junien, France.

Why it’s interesting

Hermes replica, best known for its £8,000 Birkin bags, reached €5bn in sales last year as its iconic leather goods continued to prove popular around the world.

The French luxury firm is benefiting from a boost in sales in the UK as tourists continue to flock to London to take advantage of the weaker pound. And the brand has been protected from a slow-down in department store sales in the US because it makes the majority of its sales in stand-alone stores.

What Hermes said

“In the medium-term, despite growing economic, geopolitical and monetary uncertainties around the world, the group confirms an ambitious goal for revenue growth at constant exchange rates,” Hermes said in a statement.

“Thanks to its unique business model, Hermes outlet is pursuing its long-term development strategy based on creativity, maintaining control over know-how and singular communication.”