PARIS (Reuters) -Birkin bag maker Hermes signalled a slight improvement in key market China as it reported a 9.6% rise in third quarter sales on Wednesday, outpacing peers as rich shoppers splashed out on its $10,000 handbags.
The cautiously optimistic comments on Chinese shoppers, accounting for roughly a third of global luxury sales, came after other major players, including LVMH and L’Oreal, flagged a similar uptick.
“One could note a very slight improvement in the third quarter” in greater China, finance chief Eric de Halgouet told journalists on a call, pointing to a stabilisation of real estate prices in large cities and positive stock market trends.
Sales for the three months to the end of September came to 3.88 billion euros ($4.52 billion), up 9.6%, roughly in line with analyst expectations for 10% growth, according to a Visible Alpha consensus cited by UBS.
Sales of leather goods, which include its classic Birkin, Constance and Kelly handbag models and account for nearly half of annual sales, were up 13.3%.
Hermes, which maintains tight control of production – a steady pace of 6-7% per year, frustrating shoppers who sometimes have to wait months for a handbag – has weathered the prolonged luxury downturn better than other fashion houses.
High-end fashion brands have been grappling with weaker demand in key market China, which has been hit with a property crisis and volatility in the United States as trade wars flare up.
LVMH’s sales report last week prompted an $80 billion rally in luxury shares on hopes the industry has turned the corner in China, but analysts caution it is early to call an end to the industry’s two year slump.
($1 = 0.8575 euros)
(Reporting by Mimosa Spencer, editing by Tassilo Hummel and Alessandro Parodi)
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