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Hermès posts strong growth across geographies and businesses

By Prachi Singh

22 Apr 2021

Business

Hermès website

In the first quarter of 2021, Hermès group’s consolidated revenue amounted to 2,084 million euros, up 44 percent at constant exchange and up 38 percent at current exchange rates driven by strong performance in Asia and Japan, the upturn in America and a good resistance in Europe. The organic revenue growth was 33 percent compared to the first quarter of 2019.

Commenting on the first quarter trading, Axel Dumas, executive chairman of Hermès, said: “In a still unstable context, our strong sales growth confirms the robustness of our sustainable artisanal model and the desirability of our collections to our customers all over the world.”

Review of geographical performance of Hermès sales

The company said, first quarter sales in the group’s stores rose 51 percent compared to 2020 and 41 percent compared to the first quarter of 2019. The company added that wholesale activities, down 2 percent remained penalised particularly by travel retail.

Sales in Asia excluding Japan rose 94 percent, driven by highly dynamic activity in Greater China and sustained activity in Korea, Thailand, Singapore and Australia. Sakes in Japan increased 20 percent. A new store was opened in Tokyo in February on Omotesando Avenue.

America reported sales growth of 23 percent. Europe excluding France declined 1 percent and France witnessed a drop in sales of 9 percent penalised by new restrictions during the first quarter and by store closures in several countries, especially in the United Kingdom, Germany and Switzerland. The company’s Lyon store reopened in February after renovation, followed early March by the store on rue de Sèvres.

Hermès business lines return to growth in Q1

In the leather goods and saddlery division, sales accelerated 34 percent in the first quarter, driven by the strong deliveries made at year-end. The company said, increase in production capacities continues, with the opening of the sites in Guyenne (Gironde) and Montereau (Seine-et-Marne) this year, the Louviers site (Eure) scheduled for 2022, the new site in Ardennes for 2023 and the second production site in Auvergne for 2024.

The ready-to-wear and accessories division sales increased 51 percent due to the success of the ready-to-wear and fashion accessories collections. The silk and textiles business line improved 34 percent. Perfumes and beauty posted 21 percent growth and benefited from the launch in February of the new men’s perfume H24.

Watches division posted 96 percent, reflecting the house’s technical watchmaking expertise and creativity of the collections. The other Hermès business lines reported 93 percent growth driven by homeware and jewellery.

In the medium-term, despite the economic, geopolitical and monetary uncertainties around the world, the Hermès group confirms an ambitious goal for revenue growth at constant exchange rates.