PARIS, Nov 9, 2010 AFP © - French luxury brand Hermes turned out sparkling results on Tuesday in the middle of a fight to repel unwelcome investors with takeover talk and legal issues in the air.

Hermes. Photo : AFP

Hermes "is on the way to probably the best year in at least 10 years and perhaps in all its history," Hermes executive Patrick Thomas said, announcing third-quarter sales growth of 31 percent.

Sales for the first nine months of 2010 amounted to 1.665 billion euros (2.316 billion dollars), up 19 percent in Europe, 23 percent in the Americas and 41 percent in Asia excluding Japan, where sales dipped one percent.

"Based on the strong growth achieved in the third quarter, sales growth target for the year could be around 15 percent at constant exchange rates," the company said in a statement.

"Hermes will continue to follow its long-term strategy of maintaining control over its know-how and distribution network," the company said.

French luxury products brands are among the strongest in the world and any takeover moves involving luxury names tend to generate tensions, particularly when family shareholdings are involved as is the case for Hermes. One newspaper has already termed the likely impending struggle as a "battle of the handbags".

The head of luxury giant LVMH, Bernard Arnault who himself has built up the LVMH group, said last month that he had bought 17 percent of Hermes, insisting the move did not herald a hostile takeover but that he simply wanted to be a "friendly" long-term shareholder.

Thomas has suggested that if Arnault wanted to be friendly, he should withdraw, alleging Arnault's tactics in taking the stake were questionable and said they hoped the financial services watchdog would investigate.

The head of France's financial markets authority (AMF) Jean-Pierre Jouyet said on Friday the body would open a probe "into the conditions under which this entry (into Hermes' capital) was done."

LVMH swiftly welcomed Jouyet's announcement, saying it would prove that its acquisition of a slice of Hermes' capital was within the rules. Thomas on Tuesday also welcomed the probe and vowed Hermes' philosophy would not change.

"LVMH's intrusion in the company's capital will not at all change the Hermes family philosophy that has for six generations developed this little gem into what it is today," Thomas said in a teleconference on Tuesday.

Hermes' status as a joint-stock company remains "infinitely solid" he said, but "it's entirely logical that having found a visitor in its garden, the family meets and discusses how to react to this visitor."

Thomas declined to elaborate on what move the family might take.

"You can't stop a family dealing with an intrusion into its capital from thinking. That's what we're doing for now," he said.

LVMH, or Louis-Vuitton Moet Hennessy, is a French holding company and the world's largest luxury goods group, specialising in wines and spirits, fashion and leather goods, perfumes, watches and jewellery.

It owns more than 50 global brands, including marques such as Christian Dior perfumes, Glenmorangie whisky, Givenchy fashion and TAG Hauer watches.

The luxury goods industry has seen much consolidation in recent years, and there has been speculation about the fate of Hermes since the death in May of its charismatic former manager Jean-Louis Dumas.