After three deadly attacks in a matter of 18 months, France is not enjoying a busy summer season. Fear is high, and people are staying as far away from the neighborhood as well. Dark clouds of gloom have wrapped around Europe. Terrorist attacks, refugee exodus, EU cold war are known to be the stressing factors.
Hermes becomes an ambassador in voicing out concerns in the luxury industry that no improvement is forecasted in the near future for France. This means bad news for luxury goods makers as a good portion of their clientele are international tourists. Fanning the fire is a six-month extension made by French lawmakers on the country’s state of emergency after the deadly assault in Nice.
Hermes has had a fair year of sales, however, with revenue advance of 8.1% year-on-year to $1.38 billion – which surpassed analyst forecasts. Four of Hermes’ seven segments saw sales rise with its perfume and watch segments leading the line. The brand is expecting sales growth of its leather goods to increase in the second half of the year, all thanks to a boost from its new plants. This April, Hermes opened its 15th plant. LMVH on the other hand was not experiencing such a fine year with lesser growth figures.
As in the luxury goods market, the airlines and hotel industry is also facing a slump. Lesser international bookings are being reported from across the industries – people are looking away from Europe … and towards Asia and Australia. One report said that the number of international bookings for the Asia-Pacific region including China and Australia showed a rise. Luxury travel company Abercrombie & Kent noted a “big increase” in travel to India, China, Japan, and South Africa.
[ Via : Fashionmag ]