Hermès recorded a 7.2 percent increase in total sales to €1.4 billion in 2005, with growth of 7.3 percent on a currency-neutral basis. Sales in Europe rose by 10 percent during the 4th quarter. Analysts had expected a better score, but the French luxury group blamed continuous bottlenecks in the production of handbags and luggage, which prevented the company from responding to the demand. Capacities in this sector are being raised by 10 percent this year. In terms of local currencies, Hermès’ total sales of leathergoods increased by 7.6 percent last year. Sales of clothing and accessories, including footwear, were up by 7.6 percent.