That seems to be the case chez Hermès International, which on Thursday reported revenue declines in the first quarter across all product lines except leather goods and saddlery.
While that category posted a 15.5 percent gain in the three months ended March 31, sales sank 9.5 percent for silks and textiles; 3.5 percent for perfumes; 3.3 percent for watches; 2.3 percent for ready-to-wear and fashion accessories, and 2.6 percent for jewelry, table and home wares.
“Hermès’ most desirable products are in leather goods,” said Luca Solca, managing director of equities and sector head of luxury goods at Exane BNP Paribas. “When the market is buoyant, other product categories benefit from the aura and the drive that leather goods generate. When the market is slow, leather goods are still good … but all other categories decline.”
Still, the luxury firm with equestrian roots outpaced its French rivals, registering a 6.1 percent revenue gain in the quarter to 1.19 billion euros, or $1.31 billion at average exchange rates for the period in question. At constant exchange rates, the improvement stood at 6.2 percent.
That compares to a 4 percent organic pace for Kering and LVMH Moët Hennessy Louis Vuitton, where sales of fashion and leather goods stalled in the quarter.
At constant exchange rates, Hermès sales advanced 12.6 percent in Japan, 11.6 percent in Europe excluding France; 5.6 percent in France; 4.4 percent in the Americas, described as having a “contrasted environment,” and 3.9 percent in Asia-Pacific excluding Japan.
Rogerio Fujimori, luxury analyst at RBC Europe Ltd., noted that France was “surprisingly resilient, which probably was driven by its loyal local clientele.”
Still, the steep decline in the silk category suggests that flows of tourists — big purchasers of the French brand’s colorful scarves — have been “severely hit since last November,” when gunmen killed 130 people at a concert hall and cafes in the French capital.
The dip in the perfume category is explained by dearth of new scents as “this category depends on frequent new launches to drive grow,” Fujimori told WWD.
Echoing other luxury players, Hermès cited a contrasting situation in Asia, with strength in mainland China compensating for a “difficult context” in Hong Kong and Macau. Watches were particularly “penalized,” the company noted.
Hermès cited “sustained demand” for its leather goods and trumpeted increased production capacity thanks to two new sites in Isère and Charente. On April 15, the company inaugurated a workshop in the French city of Héricourt, bringing its total complement to 15. The firm is constructing a third production site in Franche-Comté.
While best known for its Birkin and Kelly bags, Hermès said the newer Octogone and Harnais models performed well in the quarter.
The company reiterated its recently lowered guidance, saying sales growth this year could be below the medium-term goal of 8 percent at constant exchange rates “owing to the economic, geopolitical and monetary uncertainties around the world.”
Shares in Hermès rose 3.1 percent Thursday on the Paris Bourse to close the day at 316.60 euros, or $357.75 at current exchange.