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Hermès reported on Thursday a 42% fall in like-for-like sales in the second quarter, which was hit hard by the coronavirus crisis that led to the closure of the luxury group’s stores and production sites.
The saddler was also unusually cautious, warning that the impacts of the Covid-19 epidemic were still hard to assess and that the situation was still “difficult” in Europe and the United States despite a rebound in Asia.
Hermès CEO Axel Dumas added that it was impossible to predict when foreign tourists – who can account for up to 70% of luxury group sales in Europe during the summer season – would return.
According to UBS, Hermès is less exposed than its competitors to purchases by tourists, but this still accounts for 35% of its worldwide sales.
The 42% decline in sales in the second quarter is slightly higher than the bank’s forecast of a 39%-40% drop.
The coronavirus crisis also affected Hermès’ operating margin, which has long been among the highest in the sector. It fell to 21.5% in the first half from 34.8% at the end of June 2019.
On the Paris stock exchange, the Hermès share fell 3.34% to 711.4 euros at midday.
As a sign of confidence, Hermès reported that it had hired 250 employees during the first six months of the year, mainly in production, and that it was continuing to invest to expand its leather goods manufacturing capacity in France. It also raised its prices slightly.
At the height of the health crisis, which first broke out in China and then spread to Europe and the United States, Hermès had to temporarily close its production facilities and 75% of its stores.
Axel Dumas said on Thursday that the group’s online sales had increased by 100% or more in China and that this growth had continued even after the reopening of stores in that country.
The manager believes that the bulk of online purchases are made by new customers. One of them paid between 43,000 euros and nearly 100,000 euros to buy a sofa online.
Silvia Aloisi and Blandine Hénault for the French version, edited by Jean-Stéphane Brosse
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Featured photo : © Hermès[/vc_column_text][/vc_column][/vc_row][vc_row njt-role=”not-logged-in”][vc_column][vc_column_text]
Hermès reported on Thursday a 42% fall in like-for-like sales in the second quarter, which was hit hard by the coronavirus crisis that led to the closure of the luxury group’s stores and production sites.
The saddler was also unusually cautious, warning that the impacts of the Covid-19 epidemic were still hard to assess and that the situation was still “difficult” in Europe and the United States despite a rebound in Asia.
Hermès CEO Axel Dumas added that it was impossible to predict when foreign tourists – who can account for up to 70% of luxury group sales in Europe during the summer season – would return.
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Hermès reported on Thursday a 42% fall in like-for-like sales in the second quarter, which was hit hard by the coronavirus crisis that led to the closure of the luxury group’s stores and production sites.
The saddler was also unusually cautious, warning that the impacts of the Covid-19 epidemic were still hard to assess and that the situation was still “difficult” in Europe and the United States despite a rebound in Asia.
Hermès CEO Axel Dumas added that it was impossible to predict when foreign tourists – who can account for up to 70% of luxury group sales in Europe during the summer season – would return.
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