Luxury brands Gucci and Hermes today posted sparkling profits as fears of recession in traditional markets were brushed aside by soaring demand from the well-off in emerging economies and nearer to home.
Gucci parent PPR said first-half operating earnings jumped 24% to €742m (£598m), with Francois-Henri Pinault, chief executive, pinpointing the group's ability to "take advantage of periods of slower growth".
Hermes, which is extending its holding in fashion house Jean-Paul Gaultier to 45%, said operating earnings rose to €204m from €179m and its profit margin jumped higher to 25.1%.
The two groups' figures add lustre to the notion that luxury goods firms are benefiting as much from the economic turmoil as low-cost food and clothing companies at the other end of the retail spectrum.
Gucci, home to designers Stella McCartney and Alexander McQueen and majority owner of sports good firm Puma, made an operating profit of €285m, a rise of 13% in real terms and 36% at constant exchange rates. Overall PPR net profit came in up 17% at €344m.
The group also owns Yves Saint Laurent clothing, which reduced its losses to €12m and has sold off its cosmetics arm, YSWL Beauté.
It said: "Given its solid economic model, the power of its brands and companies, the geographical balance of its activities and the responsiveness of its organisation, PPR is confident in its outlook for the second half of 2008 and stands by its objectives for growth and improved financial performance for 2008."
Hermes, makers of luxury scarves and handbags and owners of Lobb, the British shoemaker, said it plans to open or renovate 15 of its stores in the second half of this year in response to increased demand.
French retailer Carrefour, which is engaged in a price war with budget food stores such as Aldi and Lidl, said, meanwhile, its operating profits rose 5.5% in the first six month to €1.4bn on the back of strong demand in Latin America. The world's second-largest retailer had issued a profits warning at the end of June.