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Hermès reports strong growth across geographies and business segments

By Prachi Singh

21 Oct 2021

Business

Image: Hermès, Facebook

The Hermès Group’s consolidated revenue amounted to 6,602 million euros at the end of September 2021, up 57 percent at constant exchange rates and 54 percent at current exchange rates compared to the same period in 2020. This increase is 35 percent over two years.

In the third quarter, the group’s consolidated revenue reached 2,367 million euros, up 31 percent at constant exchange rates compared to 2020 and 40 percent over two years. The company said that activity benefited from an upturn in sales in Europe, an acceleration in America and a sustained dynamic in Asia.

Commenting on the results, Axel Dumas, executive chairman of Hermès, said in a release: “The performance of the third quarter reflects an atypical year, during which we continue our strategic investments and accelerate job creations. In a world that remains unstable, the balance between our sixteen métiers and between our locations around the world, allows us to move forward with optimism and caution, while continuing to create beautiful, high quality, sustainable objects.”

Hermès core geographies witness positive development

At the end of September 2021, the company added, all geographical areas confirmed their strong growth, with each one posting double-digit growth in the third quarter compared to 2019.

Over the first nine months of the year, sales in the group’s stores increased 60 percent at constant exchange rates compared to last year, and 43 percent compared to 2019. The group’s wholesale activities remain penalised particularly by travel retail.

Asia excluding Japan posted 63 percent growth compared to last year and 69 percent over two years, driven by 29 percent increase in the third quarter compared to the previous year and 67 percent over two years. It gained from a remarkable performance in Greater China and other countries in Asia, despite new restrictions in Australia, Thailand and Malaysia in the third quarter. In September, Hermès unveiled a second store in Shenzhen, the company’s 28th in mainland China. Japan reported 35 percent sales growth over last year and 20 percent over two years.

Sales in America rose 85 percent and 30 percent over two years, accelerating significantly at the end of September, driven by an outstanding performance in the third quarter, up 48 percent and 40 percent over two years. A new store opened in Florida’s Aventura Mall on October 1, 2021.

Europe excluding France reported 45 percent sales increase over the last year and 7 percent over two years and France posted 40 percent growth but 6 percent decline over two years basis, strongly recovering in the third quarter, with double-digit growth of 23 percent and 13 percent, respectively compared to 2020 and 2019. The group’s store in Milan reopened in July after renovation and extension work. In September, petit h moved into the rue de Sèvres store in Paris.

Hermès posts sales increase across business categories

The company’s sales in the leather goods and saddlery division improved 46 percent over 2020 and 27 percent over a two years basis. The maroquinerie de Guyenne (Gironde), the 19th leather goods workshop of the house, opened in September, reasserting our local presence in France. The increase in production capacities continues, with the Louviers site (Eure) planned for 2022, the Sormonne site (Ardennes) for 2023 and a new site in Riom (Puy-de-Dôme) for 2024.

The ready-to-wear and accessories business line posted 71 percent growth and 43 percent over two years driven by the success of the ready-to-wear, fashion accessories and footwear collections.

The silk and textiles business line witnessed 63 percent sales increase and 10 percent over two years, while perfume and beauty with sales rise of 51 percent and 18 percent over two years benefitted from the launches of the H24 Perfume for Men and Twilly Eau Ginger, from the development of the beauty line, with the sustainable, refillable limited edition of Rouge Hermès Éclat de la nuit.

The watches business line accelerated 92 percent and 77 percent over two years, while the other Hermès business lines saw 77 percent and 98 percent increase over two years driven by homeware and jewellery.