- Prachi Singh |
For the first six months of this fiscal year, Hermès International reported consolidated revenues of 2,853 million euros (3,306.6 million dollars), up 11 percent at constant exchange and 5 percent at current exchange rates. Recurring operating income increased by 6 percent to reach 985 million euros (1,141.6 million dollars) or 34.5 percent of sales. The company said, after inclusion of 53 million euros (61 million dollars) in capital gains on disposal of property, operating income amounted to 1,037 million euros or 36.3 percent of sales and net profit increased by 17 percent to 708 million euros (820 million dollars).
Commenting on the company’s performance, Axel Dumas, Executive Chairman of Hermès, said in a statement: “Hermès achieved an exceptional performance in the first half of the year. Our commitment to the quality of know-how, the spirit of innovation as well as the creativity, always renewed, and the dedication of the women and men of Hermès, base the singularity and the integrity of our economic model; a strong model in a worldwide context that remains uncertain and unstable.”
Review of Hermès’ first half results
In the first half of 2018, the company added that revenue increased in all geographical areas worldwide. Revenues in Asia excluding Japan increased 15 percent, with positive momentum in continental China and the whole region. The group also benefitted from the January opening of the Landmark Prince’s store in Hong Kong. The Changsha store in China opened in May. Sales in Japan improved 7 percent, while revenues in America rose 12 percent. In May, the group opened its 34th store in the USA, at Palo Alto in the heart of Silicon Valley. The Cancùn store opened in Mexico at the end of March. Europe excluding France saw revenue rise of 7 percent and France, 8 percent. The company’s Monaco and Nice stores reopened in June, and the third store in Istanbul, in Emaar Square, opened in May.
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Growth in leather goods and saddlery was 8 percent. Production capacities continued to increase, with the opening of the Manufacture de l’Allan in April, completing the craftsmanship production capacities in Franche-Comté around the Seloncourt and Héricourt sites, and the start of the Guyenne and Montereau production site projects, scheduled for completion in 2020.
The ready-to-wear and accessories division revenues, during the period, increased 17 percent driven by men’s and women’s ready-to-wear collections and the success of fashion accessories and footwear. Sales of the silk and textiles business line improved 7 percent. Driven by the successes of Terre d’Hermès and of Twilly d’Hermès, sales of perfumes rose 15 percent recorded a sharp increase. The watches business line posted a 9 percent sales growth, while sales of other Hermès business lines rose 24 percent, which encompass jewellery, Art of Living and Hermès table arts.