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Hermès posts 16 percent revenue growth in Q4

By Prachi Singh

Feb. 19, 2021

In 2020, the Hermès group’s consolidated revenue reached 6,389 million euros, a 6 percent decrease at constant exchange and 7 percent at current exchange rates. The company said, revenue returned to growth in the second half, with an acceleration in the 4th quarter of 16 percent. The revenue generated in the group’s stores in 2020 was down 2 percent. Recurring operating income amounted to 1,981 million euros at 31 percent of sales, and net income group share was 1,385 million euros, down 9 percent compared to 2019.

Commenting on the group results, Axel Dumas, Executive Chairman of Hermès, said in a statement: “The solidity of our results reflects both the desirability of our collections and the agility of our craftsmanship model.”

Hermès sales performance by geographical area

The company added that revenue generated by the group’s stores in the 4th quarter was up 21 percent with a remarkable performance in Asia and in Japan. Wholesale turnover was down 32 percent, mainly penalised by sales to travellers. The stores of Daegu Hyundai in Korea, Harbour City in Hong Kong and Dalian in China reopened after being renovated and extended and rollout of the new digital platform in Asia was pursued in Hong Kong, Macao and Korea.

Asia excluding Japan reported 14 percent growth driven by 47 percent sales rise in the 4th quarter, driven by dynamic activity in Greater China, Korea and Australia. Sales in Japan were down 4 percent. A new store was opened in Osaka in September, and the Sendai Fujisaki store was renovated after expansion.

Sales in America were down 21 percent, which gradually recovered in the second half to grow slightly in the fourth quarter. The Wynn Plaza store in Las Vegas was extended and renovated in October, followed by the Short Hills store in New Jersey in November.

Europe excluding France posted 20 percent decline and France was down 29 percent. In October, a new store opened in Madrid in the Galería Canalejas and the store in Stockholm was renovated and extended.

Hermès businesses witness sales recovery in Q4

By business category, sales of Leather Goods and Saddlery were down 5 percent, which resumed growth in the second half, with 18 percent acceleration in the 4th quarter.

The Ready-to-wear and Accessories division posted 9 percent drop but continued its growth in the 4th quarter with 12 percent growth. The Silk and Textiles business line was down 23 percent and remained penalised by the drop in sales to travellers.

Perfumes and Beauty recorded a decrease of 19 percent marked by the contraction of tourist flows. Watches division was up 2 percent and up 28 percent in the 4th quarter. The other Hermès business lines saw 24 percent rise in 2020 and 56 percent growth in the last quarter driven by the Home universe and Jewellery.

The Hermès group continued to recruit and increased its workforce by 1,183 people, of which about half of them coming from the integration of the J3L group, a supplier of Hermès. At the end of 2020, the group employed 16,600 people, including 10,383 in France. The group will pay a 1,250 euros bonus to all group employees in 2021.

Picture:Hermès website