Hermes plans to raise prices next year, partly in response to the rising cost of silks and leather, the French luxury group said today as it posted forecast-beating first-half profits.

Hermes, the maker of €6,000 to €30,000 Birkin and Kelly bags, is hiking its prices after increases by its rivals such as LVMH's Louis Vuitton and Kering's Gucci earlier this year.

Like its peers, Hermes said that as well as countering rising material costs, the move was aimed at mitigating currency fluctuations such as the weak yen compared with the euro.

Japan accounts for almost a fifth of sales for Hermes, which has the most biggest exposure to the country of any European luxury goods maker, according to brokers such as UBS.

Hermes said its 2013 recurring operating margin could be close to the 2012 record of 32.1 per cent.– (Reuters)