Hermès Birkin bag made of alligator. .
Paris – French luxury handbag-maker Hermès reported a 10 percent increase in full-year profit, helped by European tourism shifting towards the UK and Italy.

Terrorist attacks in France and the decline of the pound are drawing tourists to London and Rome, chief executive Axel Dumas told reporters via a telephone call.

The luxury industry has been reporting signs of improvement after years of ebbing demand in China and a slowdown in European tourism.

Hermès reiterated its forecast for “ambitious” sales growth in the medium term.

Operating profit climbed to e1.7 billion (R23 billion) on an adjusted basis, the Paris-based company said on Wednesday in a statement, in line with the average analyst estimate.

The profit margin widened to a record 32.6 percent of sales from 31.8 percent in 2015.