Leather goods and saddlery lead Hermès Q1 sales rise

France
Published:  19 April, 2022

The French luxury group announced on April 15 that revenues at constant exchange rates came in at €2.8 billion (US$3.06 billion) in the three months to March, up 27% at constant exchange rates, beating consensus estimates, which had forecast 15% organic growth.

Sales at Birkin bag maker Hermès beat estimates in the first quarter, lifted by strong appetite for its luxury accessories, particularly in the United States and Europe, as the sector steers through the turbulence created by the war in Ukraine and Covid lockdowns in China.

All divisions clocked double-digit growth, including the leather goods and saddlery activity, which includes its famed Birkin and Kelly handbags and accounts for nearly half of annual sales at Hermès, up 15.8%.
Other divisions grew at an even faster pace, with ready-to-wear and accessories division up 44% while sales of watches rose 62%.
Hermes flagged a strong start of the year in China until the beginning of March, when some stores were closed due to restrictions aimed at stemming the spread of the coronavirus, Executive Vice President for Finance Eric du Halgouet said.
Hermes is in close contact with its 60 employees in Russia, continuing to pay their salaries while providing them with training sessions and psychological support, the executive said. Some have relocated to countries nearby, reinforcing the group's operations.

The group last month said it was suspending commercial operations in Russia, closing its three stores in Moscow and putting plans to open a new one in St Petersburg on hold. All exports to the country have been halted and Hermes is complying with rules banning the sales of products to oligarchs on sanctions lists, the executive added.