Hermès leather goods sales pick up in second half

Worldwide
Published:  22 February, 2021
Credit: Hermès

For full 2020, the luxury Group's consolidated revenue amounted to €6,389 million, down 6% at constant exchange rates and 7% at current exchange rates.

Hermès said revenue returned to growth in the second half of 2020, with an acceleration in the fourth quarter (+16%). Revenue generated in the Group's stores declined 2% compared with 2019. Recurring operating income in 2020 amounted to €1,981 million at 31% of sales, and net income group share was €1,385 million, down 9% year-on-year. Operating profitability reached 32.4% of sales and consolidated net profit (group share) was €1.4 billion (-9%).

According to Hermès, Asia, excluding Japan (+14%) posted strong growth driven by “an excellent fourth quarter” (+47%), in particular attributed to dynamic activity in Greater China, South Korea and Australia. Sales in Japan were down by 4%. North America (-21%) is reported to have gradually recovered in the second half to grow slightly in the fourth quarter, while Europe, excluding France (-20 %), and France (-29%) remained penalised by the closure of part of the stores in November in several countries, and by the introduction of new restrictions as of mid-December. The reduction in tourist flows was partly offset by the loyalty of local customers and by the strong increase in online sales.

The French luxury Group said demand remains strong for its Leather Goods and Saddlery (-5%) division, which resumed growth in the second half, with an acceleration in the fourth quarter (+18%), reflecting sustained demand and the gradual resumption of deliveries. “The increase in production capacities continues, with the Guyenne (Gironde) and Montereau (Seine-et Marne) workshops which will be inaugurated in 2021 and the Louviers site (Eure) in 2022. In addition, a new site in the Ardennes is scheduled for 2023 and the implementation of a second workshop in Auvergne has been announced”, said Hermès, reaffirming its strong local integration in France. Workforce growth reached 16,600 people globally at the end of 2020, including 10,383 in France.

The Group's other business lines are also reported to have benefitted from the good momentum of the activity in the different geographical areas. The Ready-to-wear and Accessories division (-9%) continued its growth in the fourth quarter (+12%).