French luxury fashion label Hermès, best known for its silk scarfs and leather bags, has achieved an 8.8 % third quarter turnover increase to 1.26 billion euro and a total of 3.7 billion euro for the year up until now.
Stricter import control in China
With a near 9 % quarterly turnover growth, Hermès outperformed the analysts’ expectations of a 7 % growth. “There was a considerable turnover growth in China, where local demand improved compared to last year”, CEO Axel Dumas said. He was not too shy to admit that the company benefited from the Chinese government’s decision to check the import of luxury items more strictly. This meant that more Chinese consumers bought something locally instead of abroad.
Over the past 9 months, turnover reached 3.697 billion euro, up 7.5 % compared to the same time frame last year. In its home territory, the French company still has to deal with the fallout from the terror attacks, as growth did not surpass 4.5 %. Elsewhere turnover grew at least 7 %, with Japan (+ 8.5 %) and Europe excluding France (+ 9.3 %) as the biggest growth areas.
The leatherwear division is still the French luxury label’s strongest with a 1.86 billion euro turnover over the past 9 months (+ 16.3 %), although the perfume division also performed well: + 5.9 % to 194.9 million euro. On the other hand, the ready-to-wear collection and silk scarfs are both in a slump.
