Strong sales growth for Hermes Asia
Hermes Asia sales grew 11.3 per cent last year to €1.946 billion (US$2.4 billion) as the luxury retailer set a new record for gross retail margin.
The company said the retail market was improving in Hong Kong and Macau, with the Asian market “pursuing its upward curve” and positive outlooks in Mainland China and South Asian countries.
Growth was aided by store revamps at Sogo Fuxing in Taiwan, Elements mall in Hong Kong and at Kuala Lumpur.
Sales in Japan (separated from Asia results) rose 4 per cent to €724.1 million, despite a high comparison figure from last year, which the company described as “a sustained increase” in what is a mature market, citing a selective distribution network.
Group sales totalled €5.549 billion (US$6.863 billion), up 9 per cent at constant exchange rates. Operating income rose 13 per cent, to €1.922 billion, representing a record 34.6 per cent gross margin, while net profit rose 11 per cent to €1.221 billion.
“Hermes achieved a new year of historic results, thanks to the quality of our know-how, the success of our creations and especially the incredible commitment of the women and men of Hermes,” said executive chairman Axel Dumas.
Hermes will ramp up its online offer in the region this year, with a new website scheduled to go live in China at the end of this year.
Meanwhile, the company said the sale of the Galleria building in Hong Kong’s Central district, which previously housed its flagship store, would likely generate a net capital gain of €50 million this year.
Leather drives growth
By category, Hermes’ leather goods proved the strongest performer last year, sales rising 10 per cent globally, reflecting increased production capacity as demand rose for its handbags.
The ready-to-wear and accessories division grew 9 per cent, driven by the success of new collections, fashion accessories and particularly shoes.
Sales of silk and textile products grew 6 per cent and of perfumes by 10 per cent, largely due to the successful launch of Twilly d’Hermes.
Watch sales grew just 1 per cent with what Hermes described as “good sales” in company-owned stores. Other Hermes business lines- jewellery, Art of Living and Hermes Table Arts, grew sales by 11 per cent.