Slower growth for Hermès

French luxury brand Hermès‘ last year turnover grew 8 % to 4.8 billion euro, well below 2014’s 11 % growth, but still much better than the overall luxury market’s 2 % growth.

Paris attacks

2015’s growth could have been much higher if the Pars attacks had not occurred. Over the first three quarters, Hermès managed an 8.2 % turnover growth in its home territory, but that was only 1 % in the fourth quarter, which is usually the best period thanks to the holiday season. CEO Axel Dumas did see French customers return in huge numbers around New Year’s Day, “but we do feel the impact of the sizeable drop in tourism”.

Leatherwear and ready-to-wear for the women’s collection (Nadège Vanhée-Cybulski’s first) sales grew 13 and 8 % respectively, while silk scarfs and ties dropped 1 % (and even 7 % in the last quarter). Perfume sales grew 3% while watch sales stabilized. Jewelry and the new Home collection performed well, with a 9 % sales increase. 

Regionally, Hermès grew the most in Japan (+ 18 %), followed by Europe (+ 9 %) and America (+ 7 %). Asian sales, excluding Japan, managed a 5 % growth.

Careful forecast

CEO Dumas was careful in his 2016 forecast. “Considering the economic, geopolitical and financial uncertainty worldwide, our sales may dip under our 8 % average long-term growth expectancy.” Price hikes may be very difficult to implement nowadays, which will also influence these numbers.

However, that does not mean Hermès will just rest on its laurels: the group announced it will open 4 new luxury boutiques, in Rio, Hong Kong Airport, Macao and Chinese Chongquing.