On April 23, Birkin handbag maker Hermès reported first-quarter sales of 1.51 billion euros ($1.64 billion), down from 1.61 billion euros a year earlier. At a constant exchange rate, revenue dropped 7.7%. “Resilience of sales at the end of March despite the growing impact of the COVID-19 epidemic,” the company said. And this as all Hermès stores around the world are still closed except for those in South Korea and greater China. The French luxury titan said it has kept up strategic investments and looks to be ready to resume business, while, of course, keeping costs under control.
A decline in revenue is rare for Hermès, which has a reputation for being resilient no matter what’s going on in the world. Their revenue drop, however, was less dramatic than rival luxury groups — LVMH, Kering, and Moncler — which all posted a decline in sales of 15% or more in the first three months of the year. Moreover, at the recent reopening of its Guangzhou store in mainland China, Hermès manages to secure $2.7 million record-breaking sales, once again, adding to the mystique that Hermès has the ability to sell even during the worst of times. Given this, it looks like the Asia market will continue to be Hermès bread and butter for the next quarter, while the rest of the world struggles to recover from the ongoing COVID-19 crisis.
The Jing Take reports on a leading piece of news while presenting our editorial team’s analysis of its key implications for the luxury industry. In this recurring column, we analyze everything from product drops and mergers to heated debates that sprout up on Chinese social media.