Hermès had a good first quarter as all of its business lines returned to growth and the company said it saw “a remarkable increase” in ready-to-wear and accessories, as well as watches and other categories.
In fact, revenues at the ultra-luxury French company surged by 44% in the quarter at constant exchange rates and 38% at current exchange rates. That came as the easing of Covid restrictions in Asia helped the region power ahead with revenues almost doubling there year-on-year. Revenue growth compared to Q1 2019 was 33%.
It all means the company has weathered the crisis better than some of its major competitors with the three months to March seeing revenues at constant exchange rates rising to €2.08 billion, smashing analysts’ predictions that they would be up ‘only’ 24%.
Sales through the company’s own shops were a particular high point as they rose 51% year-on-year and 41% on a two-year basis. That said, wholesale was weaker with a 2% fall as travel retail suffered.
And as mentioned, Asia was key as sales on the continent (with Japan excluded) were up 94% and China was a star performer. But Korea, Thailand, Singapore and Australia also saw buoyant business. Meanwhile, sales in Japan rose 20%, despite new Covid measures.
It wasn’t only strong in Asia as the US saw a 23% sales increase, helping to counter the negative impact in Europe of a new wave of Covid and new lockdowns. Europe revenues were down 1% and France alone was down 9%. It was hurt in particular by store closures in several countries, especially in the UK, Germany and Switzerland.
But its problems in Europe were partially offset by particular strength online. E-sales doubled or more in all regions. The company told reporters that web sales should be more than €1 billion quite soon.
And what of the strength in those individual business lines? Sales in the Leather Goods and Saddlery division were up 34% (at constant exchange rates), reaching almost €989 million. Meanwhile the Ready-to-Wear and Accessories division’s revenues rose 51% as it turned over more than €473 million, Silk and Textiles rose 34% hitting over €148 million, and Perfumes and Beauty rose 21% to reach nearly €99 million. Even better, Watches were up a powerful 96% to more than €78 million and the Other category (homewares, jewellery and more) rose 93% to almost €69 million.
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