China key driver for Hermes sales growth

Chinese consumers have been credited with driving a 14.7 per cent rise in Hermes’ sales in the June quarter.

While the Sino-US trade war may have been impacting on many brands, subduing consumer confidence and generating uncertainty, the French luxury leather retailer seems immune to the tempest.

Sales reached €1.67 billion, exceeding analysts forecasts, with first-half sales totalling €3.28 billion.

“Hermes sales were very dynamic in the first half of 2019, in all regions and in all business lines,” said CEO Axel Dumas.

The fastest-growing region, however, was Asia (excluding Japan) where sales soared 18.6 per cent in the second quarter, excluding currency effects. Hermes referred to “positive momentum in continental China and double-digit growth in all other countries in the area” in a statement.

Eric du Halgouet, Hermes’ finance director, said sales in Hong Kong rose by a double-digit rate during the first half year, despite the impact of June’s pro-democracy demonstrations when two of the company’s stores had to close briefly.

Sales in Japan rose by nearly 10 per cent.

Sales of the company’s core business lines, including handbags, rose by 12.2 per cent, while ready-to-wear fashion and accessories achieved 16.9 per cent growth.

Jewellery and homewares posted the highest growth, at 21 per cent.

In the statement, Hermes said that despite growing economic, geopolitical and monetary uncertainties around the world, the group confirms an ambitious goal for revenue growth in the medium term, at constant exchange rates.