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Luxury firms avoid downturn

The luxury sector appears to be escaping the credit crunch after French luxury groups PPR and Hermès both posted sales increases.

A strong performance from the Gucci Group, which includes the Gucci and Stella McCartney brands, helped drive PPR’s sales up 11.8% to €9.58 billion (£7.76bn) for the first half of the year to June 30. EBITDA rose 22% to €942 million (£763.6m).

Chairman and chief executive François-Henri Pinault said that the performance was thanks to the balance and strength of its brands.

He added that he was “confident” in the outlook for the second half of the year.

Luxury accessories group Hermès’ net profit rose 5.3% for the first half of the year to €134.9m (£109.3m).

Sales rose 17.9% to €813.2m (£659m) at constant exchange rates for the first half of the year. Like-for-like sales rose by 13.4%.

The Americas region saw the strongest sales increase, up 24%, while sales in Asia, not including Japan, increased 22% fuelled by growth in China. France was up 11% with the rest of Europe up 13%.

The group opened 11 stores during the period. Hermès said it would expand its distribution in the second half of the year with 15 new or refurbished stores to open in the period.

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