Strong Asian demand buoys sales at Birkin bag maker Hermes

Birkin handbag maker Hermes has enjoyed accelerating revenue across Asia, in spite of political protests in Hong Kong. (Reuters)
Updated 23 July 2019

Strong Asian demand buoys sales at Birkin bag maker Hermes

  • Hermes has been one of the big beneficiaries of this benign backdrop

PARIS: Surging demand in Asia and especially mainland China helped Birkin handbag maker Hermes post better-than-expected sales growth for the second quarter, in an encouraging signal for some of its major luxury goods rivals.
The industry has so far largely shrugged off any fallout from a Beijing-Washington trade war that could potentially hit consumer sentiment in its two biggest markets, with appetite for branded goods if anything picking among Chinese shoppers.
Hermes - along with Louis Vuitton owner LVMH and Gucci parent Kering, which are also due to report results this week - has been one of the big beneficiaries of this benign backdrop.
The French company, best known for its pricey leather goods and squared silk scarves, said sales for the April to June period grew 14.7% on a reported basis to 1.67 billion euros ($1.87 billion), and were up 12.3% at stable exchange rates.
That marked a pick-up from the 11.6% comparable sales growth a quarter earlier, when several analysts had expected a slightly more muted performance, citing a tougher comparison base.
Revenues expanded at a brisk pace across Asia, accelerating from the quarter before in spite of political protests in Hong Kong, a big regional shopping destination.
Hermes finance chief Eric du Halgouet told reporters the company had to close two of its Hong Kong stores at certain points in June due to the demonstrations, but that the drag on sales was minor.
Chinese shoppers, who makes up more than a third of the luxury goods industry's client base, have been increasingly spending at home rather than overseas, encouraged by government measures such as import tariff cuts.
Hermes said sales in continental China, where it recently revamped its e-commerce site, were particularly strong in the first half of 2019. It has just rebooted its online shopping site in Japan and will extend the overhaul to Singapore and Malaysia this year, du Halgouet said.
Hermes said operating margins for the six months to the end of June would be slightly below the record 34.5% reached in the first half of 2018, dampened by unfavourable exchange rate hedges, used to protect firms against currency swings.
It reports full results for the first half of the year on Sept. 11.


Saudi Arabia signs deal with German firm to distribute COVID-19 vaccine

Updated 24 min 15 sec ago

Saudi Arabia signs deal with German firm to distribute COVID-19 vaccine

  • The CureVac vaccine successfully passed the first phase of clinical trials in early November
  • The announcement is part of the Saudi government’s initiatives to prevent the spread of COVID-19

JEDDAH: Saudi Arabia has signed an agreement with a German firm to supply and distribute a coronavirus vaccine in the Kingdom.
Saudi Pharmaceutical Industries and Medical Appliances Corp. (SPIMACO) said on Sunday that it had signed the agreement with biopharmaceutical company CureVac on Nov. 27.
Under the agreement, SPIMACO will apply for the necessary approvals from the Ministry of Health and the Saudi Food and Drug Authority (SFDA) to meet the requirements for distributing the vaccine.
The CureVac vaccine successfully passed the first phase of clinical trials in early November. 
Results showed an increase in virus-neutralizing antibodies in all participants who took the dose, and more than 90 percent of patients were shown to have developed antibodies against both the receptors and the COVID-19 spike protein.
CureVac is aiming to lodge a submission to the European Medicines Agency during the first quarter of 2021.
The agreement includes the possibility of extending the supply and distribution rights to the UAE, Kuwait, Bahrain and Oman.
The announcement is part of the Saudi government’s initiatives to prevent the spread of COVID-19. 
In a statement on Nov. 11, Abdullah Al-Assiri, assistant deputy minister for preventive health, said the government had previously signed an agreement to receive early supplies of two or three different vaccines that were in the final stages of their clinical trials.
“Saudi Arabia will be one of the first countries to receive the vaccines,” he said during an interview on Saudia TV.
Saudi health officials have previously announced plans to offer free vaccinations by the end of 2021 to 70 percent of residents who have not contracted the virus.