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Global Sales of Luxury Goods Robust

Luxury goods firms in Europe reported robust retail sales in Europe, Asia and emerging markets Friday bucking the downturn seen in other retail sectors.

French luxury leather goods retailer Hermes (FR:RMS) and Italian designer shoemaker Ferragamo (FF:S9L) both reported double-digit increases in profits and revenues in their latest report to investors as demand for luxury goods remained robust in Asia and in Europe.

Hermes International, a maker of designer bags and silk scarves, said it was raising its annual growth target from 10 to 12% after its profits for 1-H of Y 2012 grew 28% to 335.1-M Euros (US$418.81-M).

The company said sales in Greater China rose 25%, and sales in Europe grew 10% in 1-H despite worries about the region’s debt crisis and recession. Sales rose 22% to 1.591-B Euros, up from 1,305-B Euros a year ago.

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Likewise luxury firm Salvatore Ferragamo said second-quarter net profit rose 22.5% to 55.9-M Euros (US$70.1-M), up from 45.7-M Euros in 2011. Sales rose 16.7% over the prior year.

Despite the good news shares of Ferragamo were down 1.8% in trading in Milan over worries about a drop in the company’s margins.

Shares of Hermes were up 2.6% in Paris.

Both companies attributed the success of their sales figures to the continued demand for luxury goods in Asia, and even Europe, despite the economic slowdown in both regions. Michele Norsa, CEO of Ferragamo, remained confident that growth would continue in Asia.

“This region has been the source of growth for many years and I would still say that there is huge potential in terms of numbers of consumers,” he said Friday.

“I don’t really see any major concerns over Asia’s slowdown” he said, remarking that Singapore and Hong Kong were still number one locations for Ferragamo sales and that the company had retained older, loyal customers as well as attracting younger ones.

“The brand has become younger and trendier and perhaps more aggressive [in its targeting of this market] and I would say that this is one of the reasons for the very substantial improvement of all our results this year.”