Hermès Sales Continue to Soar in 2021 – Up 31%

If it ain’t broken, don’t fix it. That certainly should be the strategy of famed Birkin and Kelly purveyor Hermès. Its financial results for both Q3 and first nine months of 2021 were well into double digits and beat market expectations. Hermès states it is “approaching the end of the year with confidence.”  We have no doubt demand will remain strong, however, from what we see, current boutique inventory in nearly every category is uncharacteristically low.

@samanthanie

But first, here are some details of Hermès’ latest news. Q3 revenue as compared to that period in 2019 and 2020 rose 40% and 31%, respectively (at constant exchange rates). For the first nine months of the year, the growth was 35% and 57% over 2019 and 2020, respectively (at constant exchange rates).

All geographic areas posted double digit sales growth for the third quarter as compared to 2019. The big ‘winner’ was . . . not Asia. Rather, it was the Americas, up 48% over 2020 and 40% over two years for Q3. Looking at the first nine months, it rose 85% and 30%, over 2020 and 2019 respectively.

But, don’t cry for Asia (not including Japan). Q3 sales rose 29% over 2020 and 67% over two years.  Japan sales also rose by double digits, as did Europe (not including France) in Q3.  France struggled the most, down 6% for the first nine months as compared to 2019. Hermès specifically noted that Europe “benefitted from the support of local customers, growing online sales and the partial return of tourist traffic.”

Of course, the limits on travel affected nearly every geographic market. But, for those not in France who stayed home, it appears they made do with shopping at home or online.

As for what we are all purchasing… it’s pretty much everything. Every Hermès business line was up strong double digits over both 2020 and the prior two year period.

The biggest boom though suggests we are looking at Chez Hermès again. The ‘Other business lines’ – which include Homeware and Jewelry – increased 77% over 2020 and 98% over two years.

The largest line (and maker of our handbags)- Leather Goods and Saddlery – was up 46% over 2020 and 27% over two years. According to Hermès, it “benefitted from significant deliveries over the third quarter and sustained demand.”

@frenchxfrenchfries

That, however, brings us back to what we are observing in our local boutiques. Very limited product supply. Even the shelves of display bags are sparse. Clearly the (repeated) shutdown of production facilities in France is having a real impact. It will be interesting to see how the holiday season plays out. Historically, fourth quarter sales were crucial to Hermès’ year end financial success.

So, are your boutiques fully stocked? Are you surprised by Hermès’ continuing financial riches? Let us know.

Love, PurseBop
XO

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