Hermès sales surge thanks to Japanese VAT increase | RetailDetail

Hermès sales surge thanks to Japanese VAT increase

Hermès sales surge thanks to Japanese VAT increase

French Hermès had a strong first quarter of 2014, as the manufacturer of luxury items saw its sales grow 14.7 % compared to the same period in 2013.

Buyers anticipate VAT increase

Japan, an important market for Hermès, was a very strong performer in 2014's first quarter as sales grew 21.7 % (in local currency). The announced price hikes and a higher VAT percentage, which kicked in on 1 April, meant that a lot of consumers preemptively bought something. That is why CEO Axel Dumas expects lower Japanese sales in the second quarter, even though he still believes the full-year results will show positive growth.

 

In Asia, excluding Japan but mostly focused on China, sales grew 17.7 % (in local currency), while the Americas enjoyed a 17.9 % surge. Europe lagged behind a bit because of the crisis, but still managed a 7.9 % increase. South European sales also improved slightly, but its home market - France - could not keep up with the pace at 5.9 %.

 

Especially the ready-to-wear (prêt-à-porter) and accessory divisions performed well, with a 19.1 % turnover increase. The leather-wear division grew 15.5 %, with the perfume division at a 5.9 % increase and the watch division remaining flat.

 

Stronger growth than the competition

The worldwide first quarter turnover reached 943.5 million euro, 10 % higher than the same period last year. Nevertheless, exchange rate fluctuations impacted the numbers somewhat, because if they had remained level, the turnover would be another 40 million euro higher.

 

The turnover increase was still stronger than anticipated, especially when one looks at the competition. LVMH and Gucci managed a like-for-like turnover increase (in the first quarter of 2014) of respectively 9 and nearly 1 %.

Questions or comments? Please feel free to contact the editors


Analysis: six reasons major brands are under pressure

17/05/2018

Global brands are increasingly struggling to ward off smaller, local companies. Some even believe the brands’ golden age has passed. That may be presumptuous, but there are some noticeable trends.

Coca-Cola is still strongest global brands, but local brands are on the rise

17/05/2018

Coca-Cola, Colgate and Maggi are the most popular FMCG brands worldwide, according to a Kantar Worldpanel report. Local brands are stealing market share however.

HelloFresh increases turnover forecast

14/05/2018

Mealbox delivery service HelloFresh has increased its 2018 forecast: the German company now expects a 35 % growth, up from its previous 30 % increase forecast. Positive results in the United States, which has become the company’s main market, were the main reason for its adjustment.

Brussels bio chain Färm keeps expanding

14/05/2018

Färm, a bio store chain from Brussels, is supporting a planned expansion with a crowd funding campaign. The chain aims to open its biggest store so far in the North of the European capital, extending its services with a bakery in the store. 

More profit from smaller volumes for AB InBev

09/05/2018

Despite AB InBev’s beer sales dropping 0.2 % in the first quarter, the Belgian-Brazilian beer giant did generate a turnover increase and a gross profit above expectations.

Ahold Delhaize mainly grows online

09/05/2018

Belgian-Dutch merger group Ahold Delhaize has had a decent first quarter, thanks to a Belgian turnaround, a good performance in the United States and strong online growth. Unfavourable exchange rates did spoil the party somewhat.