On Friday, February 8, 2019, the luxury group Hermès announced a record sales in 2018 of nearly €6 billion, thanks in particular to double-digit growth in Asia.
Hermès’ sales reached a new record high in 2018, approaching €6 billion, as the French luxury group continues to be driven by the success of its leather goods and growth in all geographical areas, particularly China.
The annual turnover of the saddler-manufacturer, who joined the CAC 40 last June, increased by 7.5% year-on-year in published figures, and by 10.4% in organic terms, according to a press release published on Friday.
The Asia excluding Japan region grew by 14% over the year, while Japan posted an 8% increase, America 12% and Europe excluding France 8%. Sales in France increased by 6% “despite the negative impact of the end-of-year events” linked to the “yellow vests” demonstrations, it is specified. By occupation, the Leather Goods and Saddlery division (core business representing half of the group’s revenue) saw its annual sales reach nearly €3 billion, up 9.4% year-on-year.
Hermès, which will publish its annual results in March, states that “thanks to healthy sales growth and good cost control, current operating profitability in 2018 should be close to 34%, after the exceptional level reached in 2017” where the margin stood at 34.6%. In 2017, the group broke all records and paid an “exceptional” dividend of 5 euros, in addition to the ordinary dividend of 4.10 euros.
Hermès’ Chairman, Axel Dumas, praised “once again this year, the group’s strong performance” which continued “throughout the year, without any break in trend. The business model is particularly strong in the current environment,” he summarized in a conference call with journalists.
He pointed out in particular that “Asia continues its strong double-digit growth, we see no change in the pace in our stores in China“, in reference to fears of a slowdown in the country, against a backdrop of trade tensions with the United States, which has been heckling luxury stocks on the stock market in recent weeks.
A new manufactures in Normandy
The French luxury brand, which already has more manufactures in France than its competitors, plans to open a new one in Normandy in 2021.
The luxury saddler has announced that he will build a new production site to manufacture leather goods. It is expected to be operational in 2021 and create 250 new jobs in the region.
“In the long term, 250 craftsmen will exercise their know-how for the manufacture of leather objects in this factory” located in Louviers in the Eure, said in a statement the saddler-mariner of the Faubourg Saint-Honoré.
Hermès already has a production site in Normandy, in Val-de-Reuil in the same department. This workshop, opened in 2017, is also dedicated to the brand’s leather goods and perfumes.
The saddler-manufacturer, who employs some 13,700 people worldwide, including 8,500 in France, is the smallest of the three French luxury giants, alongside LVMH and Kering. But it is Hermès that has the most factories and tanneries in France. In total, some thirty sites spread throughout the country, as close as possible to local know-how. The parent companies of Louis Vuitton on one hand, and Gucci on the other, have less than 20 each.
