Hermès, the renowned luxury fashion and leather goods brand, has witnessed a remarkable resurgence in sales during the first half of 2021, surpassing both the levels of 2020 and the pre-pandemic period of 2019. This remarkable performance can be attributed to the lifting of lockdown measures in key markets such as the US and Asia, coupled with the sustained demand for luxury items.
In Q2 of 2021, Hermès reported a staggering 127% year-on-year increase in sales, amounting to €2.15 billion ($2.55 billion) in constant currencies. In comparison to the same period in 2019, sales saw a solid growth of 33%. Overall, the consolidated revenue for the first half of the year witnessed a notable 77% year-on-year surge, reaching €4.235 billion, with a consistent growth rate of 33% over a two-year period.
Hermès’ recurring operating income accounted for 41% of sales, which equals €1.722 million, mirroring the performance of its rival, LVMH. Net income also showcased a significant upswing, reaching €1.174 billion, compared to €335 million in the previous year and €754 million in the first half of 2019.
The company experienced a particularly robust sales rebound in specific regions. In Europe, excluding France, sales witnessed a rise of 52% and a mere 3% dip when compared to 2019. France, although exhibiting a year-on-year increase of 35%, still encountered a decline of 16% in sales over the span of two years. In Asia, excluding Japan, sales escalated by an impressive 87% year-on-year and 70% compared to 2019, largely driven by outstanding performance in Greater China, Singapore, and Thailand. The Americas also witnessed substantial growth, with sales surging by 115% in the first half of the year.
Hermès achieved positive growth across its various product segments. Sales of leather goods and saddlery witnessed a 63% increase compared to the previous year and a solid growth of 25% over two years. Ready-to-wear and accessories sales experienced a significant upturn of 98% and 40% respectively, while silk and textiles sales rose by 72% and 6%. Perfume and beauty sales witnessed a remarkable increase of 65% year-on-year and 17% over two years. Watches sales soared by 121% and 80% respectively, and the “Other” division, encompassing homeware and jewelry, observed remarkable growth of 100% and 92% over one and two years respectively.
Axel Dumas, the executive chairman of Hermès, described the company’s performance as exceptional. He emphasized that the company had maintained its investments in store upgrades, opening new stores, and expanding its workforce, instead of implementing cost-cutting measures during the pandemic. Despite the immense challenges faced by the luxury sector throughout the pandemic, Hermès’ rebound signifies the resilience of the brand and the enduring demand for its iconic products.
Useful Links:
1. Hermès Official Website
2. How Hermès, Buoyed by Asia, Is Weathering the Pandemic
