Hermès Canton Road. B on brand.
Hermès International’s revenue more than doubled, returning to pre-pandemic levels, as the Birkin handbag-maker kept on luring shoppers to splurge on dresses and fashion.
Revenue rose 127 percent at constant exchange rates in the second quarter, beating analysts’ estimates, and sales were 33 percent higher than in the same period in 2019, Hermès said Friday. The jump was led by leather goods and ready-to-wear.
Sales returned to 2019 levels for the company everywhere except in France, where much spending depends on tourists. The strong performance follows Louis Vuitton owner LVMH, which earlier this week posted a 40 percent gain from 2019 for its key fashion and leather goods unit for the period. Shoppers worldwide have been splurging on luxury handbags, jewellery, and fashion after accumulating savings during last year’s strict lockdowns.
Hermès is probably the most exclusive publicly traded luxury brand because of output constraints. The limited supply of goods from silk scarves to leather handbags has typically helped the French brand’s mystique and pricing power. Business was particularly challenged last year because production sites in France had to shut down for four weeks in March and April.
Hermès’ quarterly revenue from its watch unit rose 151 percent, partly helped by the release in April of a $5,700 men’s watch called H08 featuring a sporty design.
Recurring operating income more than tripled to €1.72 billion ($2 billion) compared to the €1.45 billion analysts expected.
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