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Asian recovery helps Hermès to limit impact of the crisis in 2020

Feb 23, 2021 France
Asian recovery helps Hermès to limit impact of the crisis in 2020
The luxury group Hermès will withstand the health crisis in 2020 thanks to the strong recovery in Asia during the second semester, which compensates weak results in other regions, especially in Europe
“The solidity of our results reflects both the desirability of our collections and the agility of our craftsmanship model. I am proud of the work accomplished by all Hermès employees, who have shown courage, solidarity and commitment, and I thank our customers for their loyalty all over the world”, commented Axel Dumas, Executive Chairman of Hermès.

In 2020, the group's consolidated revenue reached 6.389 million euros, a decrease limited to 6% at constant exchange rates and 7% at current exchange rates. The revenue returned to growth in the second half, with an acceleration in the 4th quarter (+16%). The revenue generated in the group's stores in 2020 was slightly down (-2%). Recurring operating income amounted to 1.981 million euros at 31% of sales, and net income group share was 1.385 million euros, down by 9% compared to 2019.

Geographical Area

Revenue generated in 2020 in the group's stores (-2%) reveals good resistance after an excellent 4th quarter (+21%), and a remarkable performance in Asia and in Japan. Wholesale activities (-32%) were mainly penalised by sales to travellers and the success of online sales was confirmed in all regions.

Asia excluding Japan (+14%) posted strong growth driven by an excellent 4th quarter (+47%), in particular thanks to dynamic activity in Greater China, Korea and Australia. Despite new store closures in certain countries in the area, sales were particularly sustained over the last six months of the year. Rollout of the new digital platform in Asia was pursued in Hong Kong, Macao and Korea, with high growth in e-commerce sales. In Japan (-4%), the recovery since June was particularly dynamic, thanks to the loyalty of local customers. Sales were especially strong on the hermes.jp platform. America (-21%) gradually recovered in the second half to grow slightly in the fourth quarter. Europe excluding France (-20%) and France (-29%) remained penalised by the closure of part of the stores in November in several countries, and by the introduction of new restrictions as of mid-December. The reduction in tourist flows was partly offset by the loyalty of local customers and by the strong increase in online sales.


Business Lines

Leather Goods and Saddlery (-5%), for which demand is very strong, resumed growth in the second half, with an acceleration in the 4th quarter (+18%) reflecting sustained demand and the gradual resumption of deliveries. The increase in production capacities continues, with the Guyenne (Gironde) and Montereau (Seine-et Marne) workshops which will be inaugurated in 2021 and the Louviers site (Eure) in 2022. In addition, a new site in the Ardennesis scheduled for 2023 and the implementation of a second workshop in Auvergne has been announced. The group's other business lines also benefitted from the good momentum of the activity in the different geographical areas. The Ready-to-wear and Accessories division (-9%) continued its growth in the 4th quarter (+12%). The Women's Spring-Summer 2021 fashion show presented in October met with great success, after the digital performance of the men's collection showcased early July. The Silk and Textiles business line (-23%) remained penalised by the drop in sales to travellers. Perfumes and Beauty recorded a decrease of 19% marked by the contraction of tourist flows. Watches (+2%) achieved an excellent performance in the 4th quarter (+28%). The other Hermès business lines (+24%) confirmed their strong momentum in the last quarter (+56%) thanks to the Home universe and Jewellery. 

Growth in Workforce

The Hermès group continued to recruit and increased its workforce by 1 183 people, of which about half of them coming from the integration of the J3L group, historical supplier of Hermès. At the end of 2020, the group employed 16 600 people, including 10 383 in France. Hermès maintained the jobs and basic salaries of its employees worldwide, without resorting to governmental support. The group will pay in 2021 a 1 250 euros bonus to all group employees for their commitment and contribution to results.

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