Perfume, cashmere and shoes are in demand, concerns about inflation or not.

This is shown by the business figures published by Hermès on Thursday morning.

The turnover of the Paris-based fashion group climbed to around 2.4 billion euros in the third quarter.

Compared to the third quarter of 2019, that is an increase of 40 percent.

Hermès benefited from an upturn in sales in Europe, accelerated growth in America and sustained momentum in Asia.

The outlook for the coming months remains positive all round.

Niklas Záboji

Business correspondent in Paris

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Not everyone in the industry shares this confidence unreservedly.

Competitor Kering, for example, is suffering from the restrained travel activity of Asian tourists and, above all, the somewhat gloomy economy in the growth market of China.

The Paris fashion group Kering spoke of “solid sales growth” when it presented its current business figures on Wednesday.

Sales in the third quarter were around 10 percent higher than in the same period before the pandemic, the third quarter of 2019. Accordingly, North American business in particular was doing well.

Gucci is underperforming

Business in Asia, on the other hand, was less smooth, Kering admitted, which was not least due to the increased number of corona cases in the region. CFO Jean-Marc Duplaix referred to the sales of the Gucci brand as an example. This was clearly below average and significantly weaker than the business with brands such as Yves Saint Laurent or Bottega Veneta - precisely because tourists stayed away from Europe's luxury temples or shops had to close due to the pandemic in Asia.

Even for LVHM, the trees don't grow to the sky.

The industry leader also reported a strong increase in sales of 11 percent compared to 2019 for the third quarter.

But that is less than the 14 percent that was still achieved in the second quarter and is again almost exclusively due to the strong sales of fashion and leather goods.

The wine and spirits division, which includes premium brands such as Moët & Chandon, grew only slightly, and the business with perfumes and cosmetics, as well as watches and jewelry, treaded on the spot.

Sensitive industry

For investors, however, the weaker growth in the luxury segment does not come as a surprise.

Since the high in mid-August, the signs on the Paris stock exchange have been pointing to stagnation, not least because of lower expectations of the business development of LVMH & Co. While the price of Hermès shares has risen again since the beginning of October, the papers are quoted LVMH is still around 8 percent despite a slight recovery, and Kering remains 20 percent below the mid-August figure, which is an all-time high for all three companies.

How sensitively the industry reacts to developments in China is shown by the reaction to the slowdown in economic growth in the Middle Kingdom.

The news made the rounds on Monday morning, European time, and shortly after the stock market went public, luxury stocks went to their knees.

But a quick rebuilding is likely as soon as the corona worries subside. Luxury stocks have always been considered more cyclical than stocks from other industries. In the long term, confidence continues to dominate the markets. "Although we remain cautious about the sector in the short term, we continue to see LVMH as a structural winner," commented analysts at the American investment bank Jefferies.

The stock market valuations leave little room for doubt anyway: with a market capitalization of around 330 billion euros, LVMH is not only the undisputed leader in the French benchmark index CAC40, but is also continuously fighting for the position as the most valuable European company with the Swiss corporations Nestlé and Roche.

Hermès ranks third behind L'Oréal in the CAC40 with a market capitalization of currently around 140 billion, and Kering also makes it into the French top ten with 80 billion euros.