Q1 results show benefit to Hermès of staying true to its roots
25/04/2019
Executive chairman, Axel Dumas, said on announcing the result that sales in China had been particularly “dynamic” over the three-month period. Growth in Asia, excluding Japan, was 17% year on year, reaching €860 million, and Hermès said this “extremely good sales growth” was driven by China, where the group launched a new digital platform last October.
Focusing on Japan, Hermès said its sales there over the quarter were “remarkable”, with revenues of €204.2 million and growth of 10%, despite strong results there in the same quarter in 2018.
In the Americas, where Hermès now has 35 stores, with new openings in Orlando in March and two more to come in New York later this year, sales growth was just under 10% for the quarter, reaching almost €270 million.
Growth in Europe, meanwhile was 9.5%, with the UK the market that Hermès was most pleased with. In France, sales increased by just 1%; the company said sales in its home market were “negatively impacted by events”, a reference to the ongoing ‘yellow vest’ street protests affecting major cities most weekends. Sales in France during the quarter brought in €184.8 million, while the figure for the rest of Europe was €446.4 million.
Leathergoods was the group’s most important division during the first three months of 2019, bringing in sales of €808.2 million, which represents growth of 12.5% compared to the first quarter of 2018. Leather’s share of total revenues was, therefore, just over 50%.
Hermès said it had increased its production capacity in France to keep up with demand for “re-invented classic models” and other bags, such as the Mosaïque (pictured) and the 24/24. It has ramped up production at its l’Allan workshop, and is completing work on new workshops at Guyenne and Montereau, which it expects to come on stream in 2020. The company has also announced that it will set up another new production facility in Louviers, with the manufacture of leathergoods starting there in 2021.
The company said it was happy to continue “strengthening its roots” in France and to carry on creating employment there.
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