Mainland China Drives Hermès’ Sales Growth in the First Half of 2017

French leather goods house Hermès saw solid sales growth of 10 percent at constant exchange rates during the first six months of 2017. Hermès’ consolidated revenues totaled 2.7 million euros, or 3.2 million, an increase of 11 percent at current and 10 percent at constant exchange rates, for 2017’s first half. The French leather goods maker’s retail network performed well, with solid sales increases in all geographical areas. Hooray Hermès During the second quarter, Hermès saw a 9 percent increase at current, and 8 percent increase at constant exchange rates. This growth confirmed to Hermès the strength of its business model. For the half ending June 30, Hermès saw its revenue increase in all markets. In Asia, which excludes Japan, Hermès’ revenue increased by 14 percent. The progress was driven by mainland China, which gave the brand positive momentum for the half. Despite the strengthening of the yen, Japan saw a 3 percent increase in revenue for Hermès. The United States market, still considered a “contrasting environment” by Hermès, increased by 9 percent while Europe performed well with revenue increasing by 7 percent. Hermès attributes Europe’s performance to store openings and extensions in Rome, London and Munich. Hermès’ positive performance was due to the popularity of its ready-to-wear, accessories and silk and textiles businesses. Leather goods and saddlery saw the highest performance with 12 percent increase in sales for the half. To further assist the category, Hermès opened two new production centers the Maroquinerie de Normandie and the Ganterie-Maroquinerie in Saint-Junien. Hermès’ operations were also increased at three new sites in Charente, Isère and Franche-Comté. Hermès' ready-to-wear and accessories division increased its sales by 10 percent for the half. The category benefited from apparel, jewelry and footwear. Silks and textiles created by Hermès sustained demand due to their creative diversity. Hermès' silks and textiles’ sales increased by 6 percent for the first half 2017. During the half, Hermès brought its pop-up laundromat to New York’s Meatpacking District in May. Launched in 2016, Hermès’ Hermèsmatic celebrates the 80th anniversary of its signature silk scarves, offering a chance for owners to give their own scarves some TLC. This branded laundromat has on-site washing machines that will rinse the pre-owned scarves in either a pink or blue dye to give the silks a refresh. Hermès' perfumes division saw sales increase by 8 percent and in additional business lines, such as jewelry, Art of Living and Hermès Table Arts, combined sales grew by 13 percent. The only Hermès category to decline was its timepiece business. Due to a challenging climate, Hermes’ watch division saw sales decrease by 1 percent, but the category did show a slight upturn during the second quarter. As for its outlook for the remainder of 2017, Hermès said, “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. “In 2017, Hermès is celebrating the 'Meaning of Objects,'” the group said in its statement. “By the wealth of its creations and its fundamental style, Hermes accompanies men and women in their everyday lives. And this ambition is what gives our objects meaning. “Thanks to its unique business model, Hermes is pursuing its long-term development strategy based on creativity, maintaining control over know-how and singular communications.” A version of this story first appeared on Luxury Daily.

Mainland China Drives Hermès’ Sales Growth in the First Half of 2017

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Published July 27, 2017

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Mainland China Drives Hermès’ Sales Growth in the First Half of 2017