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Hermès posts strong sales growth driven by positive momentum in Asia

By Prachi Singh

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Business

Hermès has reported that sales were up 12 percent at constant exchange and 15 percent at current exchange rates to 1,675 million euros (1,874 million dollars) in the second quarter. The group's consolidated revenue amounted to 3,284 million euros (3,674 million dollars) in the first half of 2019, up 12 percent at constant exchange and 15 percent at current exchange rates. The company said, the group's stores posted 13 percent sales growth at constant exchange rates. The company added that in the medium term, despite growing economic, geopolitical and monetary uncertainties around the world, the group confirms an ambitious goal for revenue growth at constant exchange rates.

Commenting on the company’s performance, Axel Dumas, Executive Chairman of Hermès, said in a statement: "Hermès sales were very dynamic in the first half of 2019, in all regions and in all business lines. This sound growth reflects the House’s creative drive, outstanding know-how, and the relevance of its craftsmanship model which helps strengthen local integration."

Strong Asia demand drive sales at Hermès

In the first half, revenue increased in all geographical areas worldwide. The company said, Asia excluding Japan rose 18 percent, with positive momentum in continental China and double-digit growth in all other countries in the area. The group benefitted from store openings and extensions in recent months, particularly Shanghai IFC in China and Marina Bay Sands in Singapore. A new store opened in March in Phuket Floresta in Thailand. The company added that rollout of the new digital platform in Asia will continue at the end of the year in Singapore. Sales in Japan increased 10 percent.

Revenues in America were up 10 percent. Last April, the Group opened its 36th store in the USA at New York's Meatpacking district, and reopened the Waikiki store in Hawaii in June. Europe excluding France posted 9 percent growth and France achieved 4 percent sales rise. The store in Amsterdam reopened in May after extension, and the store on Stoleshnikov Lane in the historical centre of Moscow was renovated in June.

Hermès sees positive momentum in ready-to-wear and accessories

The company further said that momentum in the first half was driven by solid growth across all business lines, with a remarkable performance of the ready-to-wear and accessories division which reported an increase of 15 percent driven by the success of the men's and women's ready-to-wear collections and of fashion accessories and shoes.

Growth in leather goods and saddlery was 12 percent and the division's annual growth target remains unchanged. Hermès continues to strengthen its local integration in France with the opening of a training centre in Fitilieu (Isère), and the announced extension of the Ganterie-Maroquinerie de Saint-Junien workshop (Limousin region).

The silk and textiles business line saw 4 percent rise. The company said, Pierre Bénite site (Rhône) will be extended to support development and will accommodate two new printing lines. Driven by the success of Terre d’Hermès and the new creation, Un Jardin sur la Lagune, sales of perfumes were up 3 percent, while the watches business line reported 14 percent increase. Sales of other Hermès business lines increased 19 percent over the period, both in jewellery and in the home universe.

Picture credit:Hermès website

Hermès