Hermes weathers storm

Luxury goods retailer Hermes says a slowdown in sales in Hong Kong has been more than offset by solid Japanese trade.

Hermes International has reported a 22 per cent increase in second-quarter sales as growth in Japan took off, consumers finally opening their wallets on luxury goods after a long season of economic malaise.

The Parisian company said sales rose to 1.17 billion euros (US$1.27 billion). When currency exchange effects are removed from the result, sales climbed 10 per cent, two percentage points faster than in the preceding first quarter.

The company says wealthy Chinese are preferring to shop in Japan or Europe, rather than in Hong Kong as goods there are perceived to be cheaper, largely due to favourable currency exchange rates.

Hermes has seven stores in Hong Kong.