Burberry chief executive Angela Ahrendts rang the opening bell at the London Stock Exchange this morning, as revenues at French rival Hermès boosted both companies’ share prices.
Today celebrating its 10th anniversary on the LSE, Burberry has seen its shares ease following a slowdown in sales growth after several years of outperformance that has turned it into a leading fashion house. But the stock was back on the up, gaining 39p to 1269.5p.
Hermès, famed for its exquisitely made silk scarves and Birkin handbags, said sales growth, although slowing, had been propped up by better-than-expected revenues in Asia.
Year-on-year sales growth was 13.4% in its second financial quarter, down from 17.6% in the first quarter. Despite that sharp decline, most sectors would love such growth rates.
Sales reached €814.5 million (£639 million) for the three months to the end of June, with revenue in Asia, its biggest market, rising 16.2%. However sales in Japan dragged the figure down. Asian sales, excluding Japan, rose 22%.
It said reported sales rises in Q1 and Q2 remained stable at 21.9% and it is on track to hit full-year targets.
Luca Solca, global head of research at CA Cheuvreux, said: "Hermes has provided a somewhat mixed picture. Japan is disappointing against easy comparable results last year when we had the earthquake, tsunami and nuclear disaster in Fukushima. Expectedly, sales are slowing down in Europe - Hermès is more exposed to domestic demand in the old continent than other luxury goods peers. But Hermès tends to be a late indicator of consumer shifts. In fact, their waiting list works as a shock absorber. If demand weakens, you see that much later compared to other luxury peers.
"Hermes also enjoys better sales growth momentum in Asia as it was
late to enter this market compared to other groups, and is still catching up."
Despite sales growth stalling in the second quarter at Hermès, the luxury goods sector is still producing some signs of exceptional growth.
Swiss watch export statistics released today show exports rose 21.7% in June from a year ago, the strongest growth this year.
