Highlights from Hermès 2020 FY Financial Report

[duggi84]

Hello!
I'm not sure how many people know, but as a public company, Hermès releases an annual financial report that's rich with interesting information. Since I read through most of it and found some interesting details, I thought I'd highlight and paste some relevant-to-TPF sections here.

The full document contains a LOT of information about their operations, revenue, and much more, and can be found at https://assets-finance.hermes.com/s....26_universalregistrationdocument_2020_en.pdf

All quoted sections below are directly from the above document.

The first section I'll highlight is the section on Women's Bags: This section includes some significant information, including the names of several new bags launched in the 2020 year, as well as some interesting details that aren't normally revealed in press releases or marketing materials, such as the fact that they refer to the fabric used on the new Cargo Birkin as "Goéland" and not Toile, which indicates it's a different fabric. Another good detail is the line, "Hand painting on leather transforms the Kelly and Birkin bags into veritable paintings," which indicates there's some handpainted Kellys and Birkins (likely similar to the 2002 bags we've seen recently) that have yet to be revealed to the public.

1.6.1.1 Women's Bags

Driven by the annual theme “Innovation in the Making”, the collections of bags and luggage showcase the House’s creativity, brandishing the finest materials and displaying its unique savoir-faire.

Women’s bags collections, always exhibiting an abundance of creativity, offer new items that explore a variety of writings and uses.

New looks appear, the result of ingenious construction. The Hermès Della Cavalleria bag is thus distinguished by its astonishing assembly, highlighting the work in following a curve, and by its horse bit-shaped clasp, a new equestrian-inspired signature whose forms perfectly match the gentle curves of the leather. The New Drag bag, inspired by a travel bag with its wide shoulder strap, introduces a new spirit to a feminine bag combining refinement and sport-chic allure. Unexpected, the Chaîne d’Ancre bag is a small tote bag carried by hand, made up of a farandole of intertwined leather links to create an openwork space in which a silk pouch is placed. For a day-to-day look, the Cabassellier is a light new signature tote bag, with clean lines, giving pride of place to its material.

The great classics continue to adapt to current uses with new approaches, such as the Birkin Cargo with an adventurous look, transformed by the addition of numerous exterior pockets and the use of a supple and light Goéland fabric.

New ways of carrying respond to a constant search for freedom of movement. The In the Loop belt bag, whose soft fabric conjures up the quilted link of a Chaîne d’Ancre, can be carried in a variety of ways with its clever adjustable and removable shoulder strap. The mixed Émile Hermès bag, a small travel bag with a long format that can be worn across the back or on the shoulder, is a contemporary illustration of Hermès’ travel culture. Buoyed by its success, the 24/24 line accommodates a small format whose shoulder strap system allows it to be carried on the shoulder, across the body, at the waist and even on the back.

Elsewhere, the evening offer opens up a new chapter with two creations. The small, refined Hermès Minuit au Faubourg bag is crafted around a clasp with a remarkable mechanism, inspired by the techniques of watchmaking.

The Sac à Malice, a creation from the 1980s, and a nod to Hermès' creativity and imagination, innovates with a Space version evoking the conquest of space. This is a truly exceptional piece, a compendium of savoir-faire in which marquetry, gold projection and lacquer overspray, amongst others, all find their place.

The search for exceptional savoir-faire is also expressed around objects designed in an “Arts & Crafts” spirit. Hand painting on leather transforms the Kelly and Birkin bags into veritable paintings. The Roulis Mini bag is adorned with a feline coat embroidered by hand. The Constance Marble Silk bag gives pride of place to an ancestral silk printing technique. Finally, the Kellywood bag, a unique combination of marsh oak and Barénia calfskin, is a particularly remarkable and innovative piece.

Another section relevant to TPF readers is definitely The Materials which outlines 2020's color and leather innovations and highlights. Reading through this it's easy to recognize we've all seen a lot of Rose Mexico and Rose Texas lately, as well as Sesame and Frida Blue. I don't think I've seen the Herbag with the "Casaque" fabric yet, which from the description seems to be the same weaved fabric we've seen on the Men's line of bags lately.

1.6.1.4 THE MATERIALS

In terms of materials and colours, 2020 arrived under the sign of savoir-faire in order to promote a subtle approach and discreet elegance.

Delicious, voluptuous and ultra-feminine shades (Rose Mexico, Rose Texas) rub shoulders with soft, vegetal shades (Mist, Hay, Bush, Sesame) and vibrant, luminous tones (Frida blue).
Innovative printing techniques have brought new effects: the Toile H en relief adds a subtle relief to the feature that brings the pattern to life, and fine printing paves the way for unprecedented precision and delicacy on leather.

Textiles showcase the expressive power of jacquard, which makes it possible to play with patterns and colours, to accentuate finesse or relief, to give body, and to highlight the grain. The Casaque fabric, custom-made for the Herbag, uses a play on armor patterns to create a diagonal line. The male universe is enriched by a Woolywooly weaving, offering the chic and sporty elegance of a woollen gabardine.

Lastly, an original leather, discrete and refined, Dandy calfskin; a glazed calfskin whose delicacy and softness invite you to caress the small leather goods it adorns.

In-between a few sections along the way have interesting notes:

• In Jewelry and Accessories reference is made to the debut of the enameled clasp on the Clic-H
• In Hats I was surprised to learn that this 2020 is the first year the classic French Beret entered Hermès catalogs
• In Shoes they reference, "innovative hybrid models, combining leather soles and transparent rubber," for Men
• Double-Sided scarves debuted

The Tanneries and Precious Leathers section is particularly interesting because it gives some insight into some of the challenges some of us have personally faced trying to get that "bag of our dreams" during the pandemic. Most notable was the closure of their tanneries in the first half of 2020: three weeks in France and seven weeks in Italy. On the other hand, they also hired on an expert in Goat leather, which would explain the resurgence of Goat leathers we've seen in the past few months. Also interesting, the quality of Porosus Crocodile skins have been a particular long-term development that gained strong results in 2020, which may mean good news as far as the amount and varieties/sizes of bags in this leather for the future; this is intriguing because large Crocodile bags have been noticeably absent, or at least hard-to-come by from Hermès since the late 80's from what I can tell.

Another not-to-miss small blurb from this section includes the mention of three new hides: Doublure Calfskin, and Boreal and Satin Crocodile skins. Personally I'm hugely curious about these! A small nod to metallics in the form of "leathers tanned 'without metal'" appears in the next sentence.

1.6.7.5 TANNERIES AND PRECIOUS LEATHERS

The Tanneries division handles the purchase, tanning, finishing and sale of precious leathers destined for the Hermès Groupand for high-quality brands and creations, mainly in the fashion, leather goods and watch-making industries. The division also includes integrated crocodile farming operations.

The health crisis that marked 2020 led to the closure of tanning activities in the first half of the year, for a period of three weeks in France and seven weeks in Italy. The mobilisation of the teams and, the implementation of barrier measures enabled a rapid resumption of activities. Nevertheless, this crisis resulted in a sharp and significant slump in sales to external customers.

In May, the division acquired 100% of Mégisserie Jullien, a specialist in goat leather. A long-standing partner of Maison Hermès for a century and with recognised savoir-faire in working skins to create shagreen, Jullien has particular expertise in the Mysore and Coromandel goats. This takeover is in line with the Hermès Group’s strategy of mastering excellence in savoir-faire and securing supplies. It also enables the Tanneries division to integrate an additional sector, with the aim of developing it and bringing it up to the highest sustainable development standards.

Procurement quality initiatives continued throughout the year in the three sectors of calfskin, exotic leathers and goat leathers. The quality of crocodile supplies, particularly Porosus, continued to improve, thus reaping the benefits of several years’ efforts to invest in and improve savoir-faire. In the calf sector, joint initiatives with our partners were consolidated with a view to improving the quality of materials and animal welfare.

The Tanneries division is committed to ensuring that it always acts responsibly, in line with Hermès’ ethical and sustainable development values. Hence, it only sells exotic hides where the source is perfectly traced and audited, and refrains from dealing in certain species or sectors, if necessary. In particular, in 2020 the division continued to implement unit traceability of calfskin to ensure the compliance of its supplies. It also supports external initiatives and scientific partnerships aimed at improving standards in each channel.

True to its strategy of excellence and operational control, the division is continuing its actions to improve quality and develop its offer and new tanning processes. This year, Doublure calfskin, and Boreal and Satin crocodile skins joined the House’s collections. Similarly, a range of leathers tanned “without metal”, and boasting new finishes, continues to be developed and is attracting growing interest.

The Tanneries division handles the purchase, tanning, finishing and sale of precious leathers destined for the Hermès Groupand for high-quality brands and creations, mainly in the fashion, leather goods and watch-making industries. The division also includes integrated crocodile farming operations.

The health crisis that marked 2020 led to the closure of tanning activities in the first half of the year, for a period of three weeks in France and seven weeks in Italy. The mobilisation of the teams and, the implementation of barrier measures enabled a rapid resumption of activities. Nevertheless, this crisis resulted in a sharp and significant slump in sales to external customers.

In May, the division acquired 100% of Mégisserie Jullien, a specialist in goat leather. A long-standing partner of Maison Hermès for a century and with recognised savoir-faire in working skins to create shagreen, Jullien has particular expertise in the Mysore and Coromandel goats. This takeover is in line with the Hermès Group’s strategy of mastering excellence in savoir-faire and securing supplies. It also enables the Tanneries division to integrate an additional sector, with the aim of developing it and bringing it up to the highest sustainable development standards.

Procurement quality initiatives continued throughout the year in the three sectors of calfskin, exotic leathers and goat leathers. The quality of crocodile supplies, particularly Porosus, continued to improve, thus reaping the benefits of several years’ efforts to invest in and improve savoir-faire. In the calf sector, joint initiatives with our partners were consolidated with a view to improving the quality of materials and animal welfare.

The Tanneries division is committed to ensuring that it always acts responsibly, in line with Hermès’ ethical and sustainable development values. Hence, it only sells exotic hides where the source is perfectly traced and audited, and refrains from dealing in certain species or sectors, if necessary. In particular, in 2020 the division continued to implement unit traceability of calfskin to ensure the compliance of its supplies. It also supports external initiatives and scientific partnerships aimed at improving standards in each channel.

True to its strategy of excellence and operational control, the division is continuing its actions to improve quality and develop its offer and new tanning processes. This year, Doublure calfskin, and Boreal and Satin crocodile skins joined the House’s collections. Similarly, a range of leathers tanned “without metal”, and boasting new finishes, continues to be developed and is attracting growing interest.

 

[tannfran]

Well done. Thank you so much for your efforts...fascinating.

 

[CanuckBagLover]

Thanks interesting

How they are doing financially
What areas are product lines and also geographically are revenues growing

 

[FreddieMac]

The Tanneries and Precious Leathers section is particularly interesting because it gives some insight into some of the challenges some of us have personally faced trying to get that "bag of our dreams" during the pandemic. Most notable was the closure of their tanneries in the first half of 2020: three weeks in France and seven weeks in Italy. On the other hand, they also hired on an expert in Goat leather, which would explain the resurgence of Goat leathers we've seen in the past few months. Also interesting, the quality of Porosus Crocodile skins have been a particular long-term development that gained strong results in 2020, which may mean good news as far as the amount and varieties/sizes of bags in this leather for the future; this is intriguing because large Crocodile bags have been noticeably absent, or at least hard-to-come by from Hermès since the late 80's from what I can tell.

Another not-to-miss small blurb from this section includes the mention of three new hides: Doublure Calfskin, and Boreal and Satin Crocodile skins. Personally I'm hugely curious about these! A small nod to metallics in the form of "leathers tanned 'without metal'" appears in the next sentence.

Thank you for sharing.
With regards your final comment about "leathers tanned 'without metal'" please don't get this confused with metallic effect leathers. The tanning process has traditionally used chromium and other metals to preserve the hides, which is hugely polluting, so this is more likely a reference to the EU driven initiatives to 'clean up' the tanning process and make it greener.

 

[jenayb]

EXCELLENT thread. Thank you for posting.

 

[Liberté]

The first section I'll highlight is the section on Women's Bags: This section includes some significant information, including the names of several new bags launched in the 2020 year, as well as some interesting details that aren't normally revealed in press releases or marketing materials, such as the fact that they refer to the fabric used on the new Cargo Birkin as "Goéland" and not Toile, which indicates it's a different fabric. Another good detail is the line, "Hand painting on leather transforms the Kelly and Birkin bags into veritable paintings," which indicates there's some handpainted Kellys and Birkins (likely similar to the 2002 bags we've seen recently) that have yet to be revealed to the public.

Thank you so much for taking the time to share and post this information. I would just like to add that toile refers to a type of woven rough or resistant fabric or canvas in French, so Goéland fabric translates to toile goéland (seagull fabric). So you also have toile H, toile militaire and probably a bunch of others by Hermès. Toile is a generic term, so Vuitton canvas is called toile monogram in French. Both LV and Goyard are using toile enduite, or coated canvas, which just means the fabric has been coated in some material to make is water resistant so some degree. If you do a google image search for toile enduite, most of the results will be tablecloth or oilcloth.

 

[duggi84]

Thanks interesting

How they are doing financially
What areas are product lines and also geographically are revenues growing

I completely forgot to add the screenshot I took of the financials page...

Thank you for sharing.
With regards your final comment about "leathers tanned 'without metal'" please don't get this confused with metallic effect leathers. The tanning process has traditionally used chromium and other metals to preserve the hides, which is hugely polluting, so this is more likely a reference to the EU driven initiatives to 'clean up' the tanning process and make it greener.

Thank you! That makes a little more sense actually...I wish I could edit my original post with this correction!

Thank you so much for taking the time to share and post this information. I would just like to add that toile refers to a type of woven rough or resistant fabric or canvas in French, so Goéland fabric translates to toile goéland (seagull fabric). So you also have toile H, toile militaire and probably a bunch of others by Hermès. Toile is a generic term, so Vuitton canvas is called toile monogram in French. Both LV and Goyard are using toile enduite, or coated canvas, which just means the fabric has been coated in some material to make is water resistant so some degree. If you do a google image search for toile enduite, most of the results will be tablecloth or oilcloth.

Thank you! This added context is very helpful both to me and future readers of this thread =) I'll definitely be researching this more later!

 

[QuelleFromage]

Lovely summation - thank you!

I will echo that "tanned without metal" means vegetable or other natural tanning as opposed to chromium. It's better for the environment and MUCH better for artisans working with it (but can create a less even coloration).

Mégisserie Jullien is a well-known tannerie that has supplied Hermès for some time; so that's an acquisition of a company as opposed to a hire of an expert, and, as with Tanneries Haas, the acquisition will ensure that Hermès has priority or even, if it wishes, exclusivity on the tannery's production. Jullien also specializes in lamb leather as well as goat and I believe is the supplier for H Milo.

 

[duggi84]

Lovely summation - thank you!

I will echo that "tanned without metal" means vegetable or other natural tanning as opposed to chromium. It's better for the environment and MUCH better for artisans working with it (but can create a less even coloration).

Mégisserie Jullien is a well-known tannerie that has supplied Hermès for some time; so that's an acquisition of a company as opposed to a hire of an expert, and, as with Tanneries Haas, the acquisition will ensure that Hermès has priority or even, if it wishes, exclusivity on the tannery's production. Jullien also specializes in lamb leather as well as goat and I believe is the supplier for H Milo.

Oh that's also wonderful context thank you! I assumed it was a person

 

[lcd_purse_girl]

Thank you for sharing! What fascinating information and observations.

 

[Notorious Pink]

…and, thanks to @duggi84 I wrote an article on this. There really is a lot of great information about Hermès corporate in there:

Highlights from the Hermès 2020 Annual Report - PurseBlog

The Hermès 2020 Annual Report yields a lot of information about both the running of corporate Hermès and the various product lines.

www.purseblog.com

 

[Prinipessa]

Hello!
I'm not sure how many people know, but as a public company, Hermès releases an annual financial report that's rich with interesting information. Since I read through most of it and found some interesting details, I thought I'd highlight and paste some relevant-to-TPF sections here.

The full document contains a LOT of information about their operations, revenue, and much more, and can be found at https://assets-finance.hermes.com/s....26_universalregistrationdocument_2020_en.pdf

All quoted sections below are directly from the above document.

The first section I'll highlight is the section on Women's Bags: This section includes some significant information, including the names of several new bags launched in the 2020 year, as well as some interesting details that aren't normally revealed in press releases or marketing materials, such as the fact that they refer to the fabric used on the new Cargo Birkin as "Goéland" and not Toile, which indicates it's a different fabric. Another good detail is the line, "Hand painting on leather transforms the Kelly and Birkin bags into veritable paintings," which indicates there's some handpainted Kellys and Birkins (likely similar to the 2002 bags we've seen recently) that have yet to be revealed to the public.



Another section relevant to TPF readers is definitely The Materials which outlines 2020's color and leather innovations and highlights. Reading through this it's easy to recognize we've all seen a lot of Rose Mexico and Rose Texas lately, as well as Sesame and Frida Blue. I don't think I've seen the Herbag with the "Casaque" fabric yet, which from the description seems to be the same weaved fabric we've seen on the Men's line of bags lately.



In-between a few sections along the way have interesting notes:

• In Jewelry and Accessories reference is made to the debut of the enameled clasp on the Clic-H
• In Hats I was surprised to learn that this 2020 is the first year the classic French Beret entered Hermès catalogs
• In Shoes they reference, "innovative hybrid models, combining leather soles and transparent rubber," for Men
• Double-Sided scarves debuted

The Tanneries and Precious Leathers section is particularly interesting because it gives some insight into some of the challenges some of us have personally faced trying to get that "bag of our dreams" during the pandemic. Most notable was the closure of their tanneries in the first half of 2020: three weeks in France and seven weeks in Italy. On the other hand, they also hired on an expert in Goat leather, which would explain the resurgence of Goat leathers we've seen in the past few months. Also interesting, the quality of Porosus Crocodile skins have been a particular long-term development that gained strong results in 2020, which may mean good news as far as the amount and varieties/sizes of bags in this leather for the future; this is intriguing because large Crocodile bags have been noticeably absent, or at least hard-to-come by from Hermès since the late 80's from what I can tell.

Another not-to-miss small blurb from this section includes the mention of three new hides: Doublure Calfskin, and Boreal and Satin Crocodile skins. Personally I'm hugely curious about these! A small nod to metallics in the form of "leathers tanned 'without metal'" appears in the next sentence.

Excellent synopsis. Thank you.