Hermès International has reported a 41% increase in 2011 net profit, with revenue of €594.3 m. The Company’s profit figures were aided by €30 m capital gain on the sale of its 35% stake in the fashion house of Jean-Paul Gaultier. Sales at Hermès were 18.3% higher at €2.8 bn. The operating profit was up 32% at €885 m, with the profit margin increased by 3.4% age points to 31.2%, against LVMH’s 22 %, sales reported last month. The Company will pay out an exceptional dividend of €5 a share, payable in addition to a €2 ordinary dividend. The family owns 72% of the shares and controls Hermès through a limited partnership structure. In December it also created a €12 bn holding company which owns 50.2 % of Hermès shares. The holding company, known as H51, gives family members first right of refusal on share sales, instead of having to sell into the market, where LVMH might buy them. In October, 2010 LVMH announced a 17% stake in Hermès, which the Company saw as hostile. LVMH, at present, hold 22.4% stake in Hermès.
The Hermès group is planning on opening three stores this year. Prices of the products are likely to rise by about 3%, reflecting the increase in raw material prices. The prices last year increased by 1%. All the Group’s divisions reported double-digit sales increase, with Asia leading. The exception was Japan. As per reports, more than half the group’s worldwide sales were made to Asian customers.