- Prachi Singh |
In 2018, the Hermès Group’s consolidated revenue reached 5.9 billion euros (6.7 billion dollars), up 10 percent at constant exchange rates and 7.5 percent at current exchange rates. The company said, revenues grew 10 percent in the fourth quarter at constant exchange rates with growth in all the geographical areas. On the back of healthy sales growth and good cost control, Hermès added that the 2018 current operating margin should be close to 34 percent. On February 7, 2019, the company’s management decided to pay an interim dividend of 1.50 euros per share.
“In an uncertain global context, I am very pleased with the success of Hermès which saw revenue rise to 6 billion euros. Such performance reflects the attractiveness of our collections, which are based on unfettered creativity and outstanding technical expertise, enabling us to maintain our model of sustainable and responsible growth, in line with our values of craftsmanship and entrepreneurial spirit,” said Axel Dumas, Executive Chairman of Hermès in a statement.
Hermès reports sales growth across core geographies
The company added that 11 percent rise in revenues recorded in 2018 in group stores was driven by growth in all geographical areas. Hermès continued to improve the quality of its distribution network, both by opening stores and by completing renovation and extension work on almost twenty stores. Hermès also rolled out new digital platform in Europe and in China in October.
Revenues in Asia excluding Japan rose 14 percent with strong growth in China and in South Asian countries. The region particularly extended and renovated the Shanghai IFC and Singapore Marina Bay Sands stores, after opening the Landmark Prince's in Hong Kong at the beginning of the year, Changsha and Xi’an in China, and Chadstone in Australia. Revenues in Japan were up 8 percent.
In America, the company recorded sales growth of 12 percent. Hermès opened 34th store in the United States in May in Palo Alto, in the heart of Silicon Valley, the Cancun store in March, and the Mexico Artz Pedregal in December. Europe excluding France achieved 8 percent rise, driven in particular by the United Kingdom and Italy, while sales in France rose 6 percent.
Hermès witnessed growth across its business lines
Leather Goods and Saddlery sales improved 9 percent. The company added that development projects continued with the Manufacture de l’Allan workshop gaining momentum and the launch of the Guyenne and Montereau workshops, which are expected to be completed by 2020. A new site will be built in Louviers by 2021, with the creation of 250 jobs.
Revenues in the Ready-to-Wear and Accessories division rose 14 percent, driven by the success of the ready-to-wear collections, and fashion accessories, particularly shoes. The Silk and Textiles business line posted an increase of 3 percent, while perfumes reported a 9 percen increase. The Watches business line was up 10 percent and other Hermès business lines saw an increase of 20 percent, which encompass Jewellery, Art of Living and Hermès Table Arts.