Demand for Hermès’ leather goods remains high

Worldwide
Published:  13 September, 2018

The French luxury brand has posted a net profit increase of +17% to €708 million in the first half of 2018, with recurring operating profitability reaching an all-time high of 34.5% of sales.

The Group’s consolidated revenue amounted to €2,853 million in the first half of the year, up +11% at constant exchange rates and +5% at current exchange rates. Recurring operating income increased +6% to reach €985 million; 34.5% of sales. Revenue is said to have increased in all geographical areas worldwide. Asia excluding Japan (+15%) continued its “outstanding performance, with positive momentum in continental China and the whole region, and Japan (+7%) confirmed its “robust growth” with no price effect. America (+12%) progressed well with high demand, while Europe excluding France (+7%) and France (+8%) achieved good performances despite the strengthening of the Euro.

Growth in Leather Goods and Saddlery (+8%) is said to have been sustained over the first half of the year, “based on collections combining style, know-how, diversity of materials and functionality”. The luxury Group says demand remains high, both for the Maison’s classics and other models, such as the Roulis, Lindy and Cinhetic bags. 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 (+17%) pursued its growth, “thanks to the pertinence and boldness” of the men’s and women’s ready-to-wear collections and the success of fashion accessories and footwear.

Hermès says it is pursuing its recruitment process and increased its workforce by almost 280 people over the first six months. At the end of June 2018, the Group employed 13,764 people, including 8,476 in France. In the medium-term, despite growing economic, geopolitical and monetary uncertainties around the world, the Group confirms “an ambitious goal for revenue growth” at constant exchange rates.