PARIS: Hermes International Chief Executive Officer Axel Dumas said it’s too early to predict when the Chinese market will recover as the spread of the coronavirus hammers luxury spending there.
The French company closed 11 stores in China earlier and has since reopened seven of those, he said on a call with journalists.
"It’s too soon to say things are going back to normal, but we are in a process of reopening,” Dumas said.
The Birkin bag maker maintained double-digit earnings growth last year as strong ready-to-wear fashion and jewelry sales compensated for disruptions like political protests in Hong Kong and strikes in France.
Fourth-quarter sales rose 11% excluding currency swings, the French luxury brand said, matching analysts’ estimates. Full-year profit from recurring operations rose 13% to 2.3 billion euros ($2.5 billion).
Profitability remained close to record highs, with recurring operating income at 34% of sales even as the brand invested in launching a new cosmetics division.
Categories like fashion, jewelry, and home goods grew faster than the flagship leather goods division. That could help reduce Hermes’s dependence on $9,000-plus Birkin bags. - Bloomberg