First half profit at French luxury goods firm Hermès Group rose 9% to EUR128.1m (US$175m), as revenues increased and the company improved its distribution network.

Its sales amounted to EUR721.1m in the first half of 2007, representing growth of 8.2%.

This increase was fuelled partially fuelled by Silks & Textiles, up 14%. Leather Goods and Saddlery expanded 4%, with an 11% jump in leather bags, while Watches moved up 5%. Sales of Ready-to-wear and Accessories rose by 11%.

The group's distribution network expanded with the opening of four new branches in Japan, China, US, Korea.

At constant exchange rates, sales growth during the first half was particularly robust in France, the rest of Europe, the Americas and in Asia excluding Japan. In Japan, in a lacklustre climate, sales advanced by 2% following a 5% increase in the second quarter, the company said.

Currency fluctuations produced an appreciable impact on first half results, it added.

During the second half, Hermès will continue to invest in expanding its distribution network, it said, with 12 branches to be opened or renovated.

Major projects include expanding its Faubourg Saint-Honoré store, renovating its Lyon store and continued development in China with a new location in Chengdu.