Hermès, the renowned luxury brand, has shared its financial results for the first quarter of the year amidst the challenging circumstances caused by the COVID-19 pandemic. The company recorded a turnover of just over 1.5 billion euros during this period, indicating a decline of 6.5% at current exchange rates, or 7.7% at constant exchange rates. Despite facing temporary closures of production sites and stores, Hermès managed to balance the decline in its results with a “very dynamic” performance in January.
In terms of geographical impact, Europe (excluding France) experienced the most significant decrease in activity at 11%, followed by France (-9%), Asia (excluding Japan) (-9%), and the Americas (-6%). Among its business divisions, the Silk and Textile segments (-19%), as well as the Clothing and Accessories segments (-11%), were hit hardest due to the decline in store visits prior to the closures. Hermès also reported a 7% decline in its Watches division. The Perfumes division, despite a successful launch of the Beauty business in February, experienced a decline of 3%. The Leather Goods division saw a decline of 6%, but Hermès remains committed to establishing new production sites in Montereau, Guyenne, Louviers, and Ardennes.
Axel Dumas, CEO of Hermès, expressed gratitude towards employees for their solidarity actions and the gradual resumption of activities. He emphasized that protecting the health of employees and partners has been the top priority for the company during the COVID-19 crisis. Dumas emphasized that the company’s artisanal model, the desirability of its products, and the dedication of its teams will help Hermès navigate the uncertainties of the current year with courage and confidence.
Despite some production and logistics chains resuming operations since April 14th, and an uptick in sales observed in mainland China, Hermès anticipates a significant impact on its results in the second quarter. However, the company remains confident and prepared for recovery, leveraging its talented workforce, robust financial model, and cost control measures to position itself for future success.
Useful links:
– For more information on Hermès’ financial results: Hermès Official Website
– To stay updated with the latest news on luxury brands and the COVID-19 pandemic: Business of Fashion
