Hermes 2009 Sales Up 8.5 Percent!

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  1. This is very interesting news that was published today about Hermes sales, the new company structure and how the company might be re-structuring in the years to come. The article was taken from the fashion news agency, Fashion Wire Daily:

    "Hermes scored an 8.5 percent increase in 2009 turnover, making it one of the few European luxury houses to grow sales in the year just finished.

    Paris-based Hermes announced Friday that 2009 turnover had risen to 1.914 billion euros, or $2.625 billion, thanks to solid retail growth throughout the year.

    By way of comparison, earlier this week LVMH, the world’s biggest luxury group, announced that group sales had slid by one percent, while Hong Kong-based retailer Esprit announced a 3 percent fall in sales for the second half of 2009. Generally speaking, most major fashion and luxury companies suffered single figure sale declines in the tricky trading conditions of 2009.

    Hermes only provided sales figures in its release, but predicted that its net income “should be slightly up compared with 2008,” when complete financial results will be reported on 25 March 2010.

    Hermes added that “growth accelerated in the fourth quarter,” especially at the Christmas holidays, when robust trading drove up sales in the Group's stores up by 18 percent. In the most recent three-month period, sales expanded by a robust 20 percent in the Americas, by 12 percent in Asia and by 9 percent in Europe.

    In the Americas, “the fourth-quarter rebound in retail business pushed up annual sales by 7 percent,” Hermes stressed in the release. Business was also helped by three new branches in the United States, one in Canada and a first location in Brazil, a concession in Sao Paulo.

    However, in Japan, “a consistently lackluster business climate,” dragged sales down 11 percent over the year. Elsewhere in Asia, sales surged 29 percent last year, driven by China, Macau and Hong Kong, with six new branches opened in the region.

    Business was best for Hermes in its own retail network, with directly owned boutiques scoring a 17 percent rise in business through the year. However, acting in the opposite direction, wholesale revenues plummeted by 17 percent as distributors drew down their inventories.

    The luxury brand noted that it “rapidly expanded its distribution network,” adding 14 new branches and renovating or expanding nine other locations. In Europe, Hermes opened two new branches, including a first store in Turkey, in Istanbul.

    The house’s best performer by sector was Leather Goods & Saddlery, up 16 percent to 936 million euros, $1,284 billion, driven by heavy demand for leather bags. The company’s weakest performing major sector was Perfumes, where sales slid 6 percent to just 117 million euros, or $160 million, due to ”distributor inventory draw-downs over the first nine months.”

    In 2010, Hermes will push ahead with expansion plans, opening twelve new branches, including a new store on rue de Sevres in Paris and a second branch on Madison Avenue in New York."

    -Godfrey Deeny
    February 05th, 2010 @ 00:34 AM - Paris-
  2. Interesting, great news on the new stores coming up, thank you for sharing!
  3. I find that very interesting. In this economy, the higher-on-the-food-chain of the luxury brands are doing very well. It almost seems counterintuitive.

    When thinking of higher sales in the recent years, I always think of Wal-mart, Amazon, and the Dollar General....

    But good to know that Hermes is still in good business :biggrin:
  4. the increase in sales show figures and not items. so i'm wondering if the price increases reflect this. and if they increase prices approximately 16% per year........
  5. baileylab, that makes perfect sense. Perhaps the increase in price accounts for the increase in the overall sales figure...
  6. Agree. I suspect their sales are closer to just above flat if you didn't factor in the price increases.
  7. ^^^
    I agree.
  8. I'm pretty sure that is factored in when it comes to producing an executive report of the year's sales, they've got to take that into consideration if they're producing a report that will end up shaping how they expand and where. It's just interesting to see how the brand has excelled expectations and how it compared in performance when contrasted to the LVMH group of brands. Those are some very loyal customers! =)
  9. wow.. guess they can increwase price
  10. This is probably true, but I know I certainly did my part in 2009 to boost sales......:P
  11. It's usually a straight accounting deal--did the funds increase this quarter over this quarter last year or year to year. Currency fluctuations can help or hinder these figures, too, and they usually report an increase after they've raised the prices.

    As for expansion, the emerging markets are the biggest source of growth whether you're low or high end.