Demand for expensive leather bags off-set a slowdown in China for French luxury brand Hermès today.
The silk scarves and Birkin bag maker beat analyst expectations with sales growth of 11.1% for its third quarter to €990.6 million as demand for leather accessories boosted the Paris based brand.
Sales in Japan were better than expected while its American sales – up 14% - remained strong.
However fears that luxury goods brands are suffering at the hands of a Chinese spending slowdown will be raised after it reported sales in its watch business were down 10%.
For the first time it also today acknowledged a “slowdown in China's luxury market.” A crackdown on ostentatious spending by government officials in the country has hit sales of products including watches and expensive spirits such as cognac.
The group said it retains its “mid-term objective” of sales growth of around 10% but said its operating margin could be “slightly less” than the all-time high achieved last year of 32.4% due to currency swings.
