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Hermès blew away forecasts by doing what it does best: selling leather bags to rich Chinese

Hermès, the luxury goods retailer, trounced sales expectations as unrelenting demand from rich Chinese shoppers clamoring for its expensive leather bags and silk scarves drove last year’s sales up 22.6%, to €3.48 billion ($4.67 billion), compared with 2011.

Reduced spending in Europe, and even—although in different measure—in China (where the government is banning flashy gifts to public officials and ostentatiousness is not quite as in style as it was last year) have hurt Hermès’ competitors some. LVMH Moët Hennessy, maker of the Louis Vuitton brands, reported its slowest sales growth since 2009.

Even as luxury spending slows momentarily, for some companies the market to watch is China, which has delivered thrilling sales growth for most of them in the last several years. According to the CEO of Ermenegildo Zegna, the Italian fashion house, Chinese growth will cool down a bit from recent rates of 20% to 30% in recent years, to 10%-15% in the years to come.

But not for Hermès. Asia-Pacific sales, excluding Japan, rose 30% last year (compared with 21% growth in the Americas, and a more muted 12.5% in Europe).

In the second quarter of last year (the spring months), Asia accounted for about 47% of Hermès’ sales, compared with 35% from Europe and 16% from the Americas. Discretionary spending is supposed to grow in China 13.4% every year between 2010 and 2020, according to a McKinsey report.

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