Hermes profit down 7 percent in 1st half

PARIS — Luxury goods maker Hermes International on Friday reported a 7 percent drop in net profit in the first half of the year but said it still plans to open or renovate several stores in the second half.

In a statement, the maker of high-end scarves and Birkin handbags blamed the drop on currency fluctuations and a lower rate of return on financial investments.

Hermes reported net income of euro125.4 million ($178.9 million), down from euro134.9 million in the first half of 2008. It reported sales growth in all regions except Japan, where sales fell 4 percent.

With scarf sales holding strong despite the financial crisis, the company said it will continue to invest during the rest of 2009, opening or renovating at least 10 stores, mostly in Asia and the United States. It opened five new stores in the first half.

The company maintained its prediction for steady full-year sales and a "slight" drop in income over all of 2009.

Shares fell 1 percent to euro103 in Paris.