ATHENS, May 28 (Reuters) - Greek jewellery retailer Folli Follie (FOLr.AT) said on Thursday 28 May first-quarter net profit rose 28.5 percent year-on-year thanks to a diversified business model and increased revenues.

Folli Follie Watches 2009

Folli, which sells products ranging from luxury goods to apparel in Europe and Asia, reported net profit of 24.9 million euros ($34.55 million) for the first quarter, up from 19.4 million in the previous year.

"We managed to withstand the deterioration and volatility of a challenging operating environment thanks to our diversified business lines, a geographic balance of our revenues and the strength of our brands," George Koutsolioutsos, Vice President of Folli Follie, said in a statement.

Retailers around the world are taking a hit from slowing economies but Folli weathered the downturn on strong business in Asia, which accounts for nearly two thirds of the group's revenue.

Sales rose 11.4 percent to 210.9 million euros with revenues from Asia, excluding Japan, up 23 percent.

The company said it will continue with strict cost management and its expansion policy in key markets this year.

Folli sells luxury goods in about 380 directly-operated stores in Europe and Asia and holds a majority stake in Greek duty-free monopoly HDFS (HDFr.AT) and department stores operator Elmec (ELMr.AT).

Folli shares trade about 5.4-times estimated 2009 earnings, compared with a multiple of 15.5-times for the European luxury goods sector, according to Reuters Estimates.

Analysts attribute the hefty discount to Folli's low brand awareness and visibility compared to European peers.

The stock is up 83 percent since the start of the year, outperforming the Athens general index .ATG, up 25 percent. (Reporting by Angeliki Koutantou and Renee Maltezou; Editing by Rupert Winchester)