Following the recent news of Bali Barret’s departure, luxury house Hermès unveiled its financial results amidst the challenging economic and social conditions brought on by the Covid-19 pandemic. The second quarter saw a significant decline of 42% in sales, with overall revenue for the period between January and June 2020 decreasing by 24%. The closure of physical stores and the halt in tourist activities heavily impacted these figures. Geographically, the Americas experienced the most severe decline at 42%, followed by Europe (excluding France) at 36%, Japan at 23%, and Asia at 9%. However, the brand did witness strong growth in e-commerce sales after recently launching its new digital platform in Asia. Meanwhile, sales in France saw a decrease of 38% during this period.
Axel Dumas, the Managing Director of Hermès, acknowledged the unprecedented crisis and emphasized the importance of testing the strength of their business model. Despite the challenging circumstances, the company maintained its commitment to preserving jobs and supporting their global employees by keeping their basic salaries intact, without relying on exceptional public assistance from various states. Dumas expressed pride in the dedication, courage, and solidarity demonstrated by the Hermès teams during these trying times.
Although most of the group’s stores have now reopened, Hermès management believes that the resilience of the brand lies in its artisanal model rooted in France, a well-balanced distribution network, and a loyal local clientele. These elements, along with the loyalty of customers, the desirability of their collections, the agility of their omnichannel network, and the group’s independence, provide confidence in the future and serve as a foundation for the company’s recovery.
Useful links:
– Hermès official website
– CNBC article on Hermès’ second quarter sales decline
