More Birkins apparently mean more money for luxury purveyor Hermès. Judging by the recently released Hermès financial reports (and our social media accounts), the world (and PurseBop community) continues to love the “Orange.” For fiscal (and calendar year) 2018, Hermès net profit rose 15% to 1.4 billion Euros. Revenue was up 10.4% at constant exchange rates (7.5% at current exchange rates). Hermès Executive Chairman Axel Dumas termed the results “remarkable” and confirmirmation of “the strength of the Group’s growth model.”
Geographically, sales in Asia (not including China) and the Americas were the top of the charts. The former rose 13.7% and the latter 11.5%.
As you may recall, in 2018, Hermès opened new stores including the Landmark Prince’s in Hong Kong, Changsha and Xi’an in China, Chadstone in Australia, Palo Alto, CA in the United States, and two stores Mexico (Cancum and Mexico Artz Pedregal). Hermès also reopened expanded and renovated stores including Paris’ George V, Shanghai IFC and Singapore Marina Bay Sands; and enhanced its digital presence particularly in Europe and China. It’s continuing to grow this year (read: A New Hermès Boutique Opens Its Doors).
So what is everyone buying? Is it only Birkins and Kellys? It should be no surprise that the leather goods group (which includes saddlery) – and is Hermès largest sales group by more than twofold – was up 9% in part due to the increase in production capacity with the addition of new facilities and more on the way. Hermès points particularly to its classic bags – like the Birkin and Kelly – and the newer 24/24 and Mosaïque as driving demand.
Other lines also are driving the success. Ready-to-wear sales rose 14%, watches 10%, and the “other,” which includes Jewelry and Tableware spiked 20%. Of course, the latter are much smaller parts of the Hermès business.
Evidently, increased availability of Hermès products is boosting its financial results. But is it changing the way you feel about Hermès’ traditional cloak of exclusivity? Let us hear from you.