Hermès returns to growth in third quarter

Worldwide
Published:  23 October, 2020

The French luxury Group said that, at comparable exchange rates, its Leather Goods and Saddlery business line improved strongly in the third quarter of the year, with an 8% growth as a result of the resumption of deliveries and sustained demand.

Hermès said sales in the third quarter (+7% at constant exchange rates and +4% at current exchange rates) were driven by strong activity in the group's stores (+12% at constant exchange rates), the momentum in Asia and a significant improvement in all other geographical areas. At the end of September, the Group’s consolidated revenue amounted to €4,288 million, down 14% at current exchange rates and at constant exchange rates.

Between January and September, sales in the Group’s stores were down 11% at constant exchange rates, but increased 12% in the third quarter. Hermès said the acceleration of online sales is strengthening, with no rupture in trends, with a sharp increase in traffic and conversion rates. Wholesale activities are down 35% over nine months, mainly penalised by travel retail.

Revenue for the Leather Goods and Saddlery business line declined 13.3% in the first nine months of the year but improved in the third quarter (+4.8%). “The increase in production capacities continues, with the opening of the sites in Guyenne and Montereau in 2021, consolidation of our capacities in Normandy with the Louviers site in 2022, and the project in Ardennes in 2023. A second production site in Auvergne has been announced and will become the 22nd Leather Goods and Saddler workshop”, said Hermès. All the sites are located in France. The Watches business line posted an 8% revenue decline, but marked a 13% growth in the third quarter.

In the medium term, “despite growing economic, geopolitical and monetary uncertainties around the world”, the French Group said it confirms “an ambitious goal for revenue growth at constant exchange rates.”