Hermes 2Q Sales Rise 13% on Continued Appetite for High-End Luxury

People stand with Hermes shopping bags as they wait at a traffic light in Tsim Sha Tsui, a bustling shopping hotspot, in Hong Kong, China December 5, 2023. (Reuters)
People stand with Hermes shopping bags as they wait at a traffic light in Tsim Sha Tsui, a bustling shopping hotspot, in Hong Kong, China December 5, 2023. (Reuters)
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Hermes 2Q Sales Rise 13% on Continued Appetite for High-End Luxury

People stand with Hermes shopping bags as they wait at a traffic light in Tsim Sha Tsui, a bustling shopping hotspot, in Hong Kong, China December 5, 2023. (Reuters)
People stand with Hermes shopping bags as they wait at a traffic light in Tsim Sha Tsui, a bustling shopping hotspot, in Hong Kong, China December 5, 2023. (Reuters)

Birkin-bag maker Hermes reported a 13% rise in second-quarter sales on Thursday, demonstrating the continued appetite from wealthy shoppers for its luxury handbags, even as less affluent consumers pull back.

Sales at the French luxury group grew to 3.7 billion euros ($4.02 billion), a 13% organic sales rise that strips out currency fluctuations. The figure was in line with analyst expectations, according to a Visible Alpha consensus.

Operating profit for the first half was 3.1 billion euros, compared to a forecast from consensus provider Visible Alpha for 3.2 billion.

One of the most steady performers in the luxury goods sector -- even as economic conditions worsen -- the French group's results stand out after a string of disappointing earnings updates from peers which have raised investor concern about uncertain prospects for the sector in the coming months.

Hermes' famously classic designs and tight management of production and stock have helped reinforce the label's aura of exclusivity, and CEO Axel Dumas told reporters the company had seen "no big interruption in trends".

However, he said Hermes was seeing slightly less traffic with aspirational clients, which was impacting higher volume products like fashion accessories.



ASOS Warns of $200 Million Hit from Atlanta Distribution Center Closure

A keyboard and a shopping cart are seen in front of a displayed ASOS logo in this illustration picture taken October 13, 2020. (Reuters)
A keyboard and a shopping cart are seen in front of a displayed ASOS logo in this illustration picture taken October 13, 2020. (Reuters)
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ASOS Warns of $200 Million Hit from Atlanta Distribution Center Closure

A keyboard and a shopping cart are seen in front of a displayed ASOS logo in this illustration picture taken October 13, 2020. (Reuters)
A keyboard and a shopping cart are seen in front of a displayed ASOS logo in this illustration picture taken October 13, 2020. (Reuters)

Britain's ASOS Plc flagged a one-time impairment charge exceeding $200 million in fiscal 2025 due to the "mothballing" of its Atlanta distribution center on Wednesday, as the online fashion retailer navigates a tough business environment.

Over the last couple of years, ASOS has been working to transform its business after losing popularity among its target audience of young customers and dealing with an inventory surplus.

This effort by the retailer, however, has coincided with the growing prominence of budget-friendly fast-fashion brands such as Shein and the Chinese online retailer Temu.

The decision to phase out the Atlanta facility comes after ASOS completes a multi-year warehouse automation project.

US customers will be served from the retailer's automated UK fulfillment center from the second half of 2025 and through a smaller local site, ASOS said.

Due to the shift, the retailer expects to take a one-time hit of about 190 million pounds ($231.91 million) on its reported profit in fiscal 2025, and then save between 10 million pounds and 20 million pounds annually in core earnings from financial year 2026.

ASOS intends to market the Atlanta site - seven employees will be offered new roles if possible, and many third-party logistics workers will be given opportunities at nearby locations, the company said.

The firm, which opened a local US office in 2024, said it will continue to grow and build its local presence.