Two months after its successful public design competition, French luxury brand Hermès has announced positive financial results for the first half of 2019. The company’s CEO, Axel Dumas, stated that the growth in these six months demonstrates the loyalty of customers and the creative excellence that drives the brand’s success.
During this period, Hermès experienced a 15% increase in operational results, matching the growth rate of its turnover, which reached 3.284 billion euros. The company’s current operating profitability is also close to a record level, standing at 34.8%, just below the previous year’s figure of 34.9%.
Looking at individual markets, Asia (excluding Japan) showed the highest growth with an 18% increase in comparable exchange rates, primarily driven by strong demand in mainland China. Sales in America and Japan also saw a 10% increase, while Europe (excluding France) recorded a 9% growth. Sales in France saw a modest 4% increase in recent months.
In terms of divisions, the Clothing & Accessories segment had the highest performance with a 15% increase, followed by Leather Goods & Saddlery with 12% growth. To meet international demand, Hermès has opened its 17th workshop/training center and has plans to open two new production sites by 2020-2021. Additionally, the company has recruited 500 new employees, bringing the total workforce to 14,751, with 62% based in France.
Despite acknowledging economic uncertainties, such as the fragility of the Hong Kong market, Hermès remains ambitious in its objective to increase turnover at constant rates. The brand is focusing on optimizing its brick-and-mortar stores while also expanding its e-commerce platforms. Renovations of existing stores and the opening of flagships, such as the “Crystal House” in Amsterdam and the “Cross The Line” concept in New York’s Meatpacking District, are part of this strategy. Hermès is also set to launch its first Beauty line, further appealing to Generations Y and Z.
Overall, Hermès has demonstrated strong growth and profitability in the first half of 2019, attributed to its loyal customer base and commitment to creative excellence. As the luxury brand continues to expand and adapt to market demands, it remains optimistic about its future prospects.
Useful Links:
1. Hermès Official Website
2. Hermès Revenue Statistics
