Hermes International 2007 profits rise

French luxury goods group Hermes International said last year net profit rose 7.3 per cent, as unfavourable exchange rates capped its earnings despite disposal gains and a year-end boost to business.

The maker of trademark silks and handbags said net profit rose to €288 million, lifted by an exceptional gain of €9.2 million from the disposal of bonds in camera maker Leica.

Current operating income rose 3.4 per cent to €414.5 million on already reported revenue up 7.3 per cent to 1.63 billion, after its renovated headquarters store in Paris lifted year-end sales.

Hermes said it would continue to invest this year to develop its retail network and improve its production capacities, but gave no detailed outlook.

Last month, Hermes chief executive officer Patrick Thomas told Reuters he was optimistic about prospects for 2008, targeting sales growth at constant exchange rates of at least 10 per cent and saying Hermes sought to maintain its profitability at the same rate as last year.