Hermes 2010 Sales Booms 25 Percent

On Friday, February 4th, 2011

In its first financial statement since French luxury goods titan Bernard Arnault began aggressively buying its shares, Hermes International announced Thursday that 2010 sales had surged by a whopping 25.4 percent.

The French luxury-goods group said turnover had risen to 2.4 billion euros, or $3.3 billion at current exchange rates, buoyed by heavy business at the Christmas.

In a release, Hermes said it “exceeded its sales target” thanks to “extremely strong business momentum for the company-owned stores, particularly during the Christmas season.”

In that statement, the house made no comment on the acquisition of some 20 percent of its shares by LVMH, the giant French luxury conglomerate controlled by its chairman Arnault. It did, however, announce a dividend payment of 1 euro per share.

Hermes is due to report full 2010 results on March 4, and did not release a figure for net profit.

Breaking down business on a geographic basis, Hermes added that sales advanced 25 percent in the Americas, and 16 percent in both Asia and Europe.

In the Americas, Hermes business benefited from strong turnover in its own stores, where sales gained 28 percent, and by the success of the brand’s first boutique dedicated to men, a Madison Avenue location opened in New York in early 2010. Total sales in the Americas amounted to 385 million euros, or $525 million.

Hermes was also particularly active in Asia, opening 10 new stores, four of them in mainland China. Looking ahead, Hermes said it plans to open a further 10 stores in the current year.

The Paris-based brand’s star performer was its own network of boutiques, which surged 31 percent. Worldwide, Hermes opened 13 new branches and renovated or expanded another nine locations. Wholesale sales, however, gained a meager 3 percent.

In terms of product lines, Hermes said that at constant exchange rates its leading area of growth was its watch division, which surged 23 percent, while its most modest advance was in tableware, up just 11 percent.

The brand’s key sector remains leather goods and saddlery, making up 51 percent of turnover. It enjoyed a 21 percent increase in sales in 2010.

comment closed