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Affected like the entire luxury sector by the Covid-19 epidemic, Hermès announced on Thursday 23 April that first-quarter sales for 2020 were down -6.5% (-7.7% at constant exchange rates) at 1,506 million euros.
Its activity was affected by the Covid-19 epidemic in the first quarter of 2020, down (-6.5%), with a sharp decline in Asia.
All geographic regions were impacted by the health crisis and store closures.
Activity in the French luxury goods group’s stores was down 7% at constant exchange rates. In Asia, only Japan (+1%) showed remarkable resilience. The upholsterer has its loyal customers there, particularly for exclusive pieces that are a credit to its know-how.
In Asia – excluding Japan – the French group recorded a sharp decline in sales…
Activity at end-March by business line
On a constant exchange rate basis, Leather Goods & Saddlery posted a decline (-6%) resulting from the closure of stores in the various geographic areas.
Hermès announced the closure of its production facilities in France as of 17 March to protect all its employees, with the exception of the Hermès Parfums site in Le Vaudreuil, where production of hydroalcoholic gel was carried out on a voluntary basis.
Investments in production capacity were maintained, with the continuation of projects at the Guyenne and Montereau leather goods factories and the announcement of new leather goods factories in Louviers and the Ardennes. Hermès continued to strengthen its territorial foothold.
The Group’s other divisions were also heavily impacted by store closures in all geographic regions, following an excellent January that benefited from the favourable momentum of the Chinese New Year.
Clothing and Accessories (-11%) and Silk and Textiles (-19%) were further penalised by the traffic declines that preceded the closures.
Perfumes, despite the very successful launch of the Beauty business at the beginning of February, were down (-3%) as was Watches (-7%). The Other Hermès Sectors (+4%) held up particularly well thanks to Jewellery.
To date, the Saddler’s has seen a resurgence in sales in its reopened boutiques, but these are only in mainland China and Korea, while business is very weak in Japan.
The evolution of the pandemic and the measures decided by the States do not allow at this stage to foresee the dates of reopening of the stores, the group specifies in a press release.
In the medium term, despite the increased economic, geopolitical and monetary uncertainties around the world, the Group confirms an ambitious target for sales growth at constant exchange rates.
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Featured Photo : © Hermès[/vc_column_text][/vc_column][/vc_row]
