Hermes reports surge in quarterly sales, lifts forecast

French luxury goods company Hermes International Tuesday said family shareholders are serene and united but vigilant about the presence of larger peer LVMH Moet Hennessy Louis Vuitton SA on its shareholder register, as it raised its full-year outlook and said it expects to post a record year.

The famous saddlery maker said third quarter sales rose 31% to EUR590.1 million, on strong demand for its leather goods in Asia and Europe, further signalling the luxury industry's bounceback is gathering pace.

The company raised its outlook for full-year sales growth to 15% with a one to two percent improvement to last year's operating margin of 24%.

Hermes was thrust into the spotlight last month after LVMH revealed it had built up a 17.1% stake in the company in one sweeping declaration partly through equity swaps it set up in 2008, thereby passing three ownership thresholds that require public disclosure.

The head of the French market watchdog, Jean-Pierre Jouyet, last week said his office is launching an investigation into the stake-building and that French rules on declaring ownership thresholds need to be tightened.

LVMH's aggressive stakebuilding has led to suggestions other luxury companies, such as Swiss peer Compagnie Financiere Richemont could also be interested in Hermes, raising the prospect of a bidding war for the company which has long been the subject of takeover speculation despite the firm grip of the Hermes family.

But Hermes Chief Executive Patrick Thomas clarified Tuesday that there was no sign of Richemont on the shareholder register when the company last checked on Oct. 28. However he signalled that, in contrast to LVMH, he would not be concerned if Richemont were to become a shareholder: "Knowing Richemont well and having good relations with them, I think they are the type who would act in a friendly way," he told reporters on a conference call. Richemont declined to comment.

Heirs of the Hermes family own over 73% of Hermes, Thomas reiterated Tuesday. At 1530 GMT, Hermes shares traded up 7.5% to EUR165.90 while the SPF-120 Paris index traded up 1.1%.