Hermes sales results led by perfume

By Guy Montague-Jones

- Last updated on GMT

Related tags Sales growth Lvmh

Perfume sales drove double-digit sales growth for Hermes as the luxury goods company shrugged off concerns about an economic downturn.

The France-based company reported a 12.8 per cent increase in sales for the first half of the year taking the top-line up to €813.2m.

This growth was achieved despite the negative unfavorable impact of the strong Euro. At constant exchange rates the sales growth figure was 17.9 per cent.

Perfume is a star performer

Perfume was one of the best performing product segments with sales leaping 20.1 per cent to €63.5m for the first half of 2008 at reported exchange rates.

The company said the continuing strong performance of Terre d'Hermès and the recent launches of Kelly Calèche and Un Jardin après la mousson helped boost its perfume sales.

The success of these newly launched ranges illustrates the potential of marketing a perfume product using the reputation of one of a fashion houses' emblematic brand names.

Fashion house trend

This is becoming something of a trend within the industry, with a growing number of leading cosmetics players such as Avon and L'Oreal teaming up recently with fashion houses to release fragrance ranges.

In the latest quarter perfume sales growth was highest at 26.4 per cent.

While company specific factors such as launch times may have been responsible as increased sales growth amid declining consumer confidence is in line with the predictions of lipstick theory.

Consumers may be turning to inexpensive luxury goods to console themselves when the economy is putting high priced luxuries out of reach. The results of other luxury brands in the coming weeks will put this hypothesis to the test.

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