French group Hermès joins the long list of luxury groups with excellent semi-annual results. The group’s turnover went up 22% to 1.305 billion euro, while net profits rocketed to 290.9 million (+49.5%). This was the most profitable six months yet for the handbag and scarf producer, as operating profits as a percentage of sales rose to 32%.
Historically high margins
These terrific results allow Hermès to maintain its estimates for 2011: a turnover growth of 12 to 14% and an operational margin which is “historically high”. The group vows to invest in its own workshops and stores (ten new stores are planned), claiming this strategy, combined with its craftsmanship, know-how and thorough control of its own distribution network, is what causes its success. Analysts add to that its “timelessness” and “classical image”, causing the brand not to be harmed by passing fashion trends and the economic crises.
The group is one of the most diversified fashion companies in the world, especially known for its leather (49% of turnover). Clothing and accessories (20%), silk (12%), perfumes (5%) and watches (5%) make up the other half of the company’s turnover, the latter being the fastest growing department in the company.
Hermès has been on the stock exchange since 1993 and is partly (20%) owned by its rivals LVMH since 2010.
