Luxury goods firms in Europe reported booming retail sales in Europe, Asia and emerging markets on Friday bucking the downturn seen in other retail sectors.
French luxury leather goods retailer Hermes and Italian designer shoemaker Ferragamo both reported double-digit increases in profits and revenues in their latest report to investors as demand for luxury goods remained robust in Asia – and even in Europe.
The company said sales in Greater China rose 25 percent, and sales in Europe grew 10 percent in the first half, despite worries about the region’s debt crisis and recession. Sales rose 22 percent to 1.591 billion euros, up from 1,305 billion euros a year ago.
Likewise luxury firm Salvatore Ferragamo said second-quarter net profit rose 22.5 percent to 55.9 million euros ($70.1 million), up from 45.7 million euros a year ago. Sales rose 16.7 percent over the previous year.
Despite the good news shares of Ferragamo were down 1.8 percent in trading in Milan over worries about a drop in the company’s margins. Shares of Hermes on the other hand were up 2.6 percent in Paris.
Both companies attributed the success of their sales figures to the continued demand for luxury goods in Asia, and even Europe, despite the economic slowdown in both regions. Michele Norsa, Chief Executive of Ferragamo, remained confident that growth would continue in Asia.
“This region has been the source of growth for many years and I would still say that there is huge potential in terms of numbers of consumers,” he told CNBC Europe’s “Squawk Box” on Friday.
“I don’t really see any major concerns (over Asia’s slowdown]” he said, remarking that Singapore and Hong Kong were still number one locations for Ferragamo sales and that the company had retained older, loyal customers as well as attracting younger ones.
“The brand has become younger and trendier and perhaps more aggressive [in its targeting of this market] and I would say that this is one of the reasons for the very substantial improvement of all our results this year.”