Hermès flexes its muscles and comes out of 2020 with -6%

Hermès flexes its muscles and comes out of 2020 with -6%

Hermès flexes its muscles. The luxury brand recorded a +16% in revenue in the last quarter (+47% in China) and managed to limit the pandemic’s impact. The entire year closed with revenue down by just 6% at constant rates. Hermès also hired 1,183 new employees and announced a cash prize of 1,250 euro for each of its current 16,600 workers.

 Hermès flexes its muscles

“The sturdiness of out results shows the desirability of our collections, as well as the agility of our artisanal model – commented Alex Dumas, executive president of the French luxury brand -. I am proud of the work done by all of Hermès’ employees, as they displayed courage, solidarity and effort, and I thank our clients for their loyalty all over the world”. Hermès’ 2020 closed with a consolidated revenue of 6.39 billion euro. The result was also achieved thanks to a solid 4th quarter, during which sales increased 16%, or exactly double what was forecasted by the consensus cited by UBS’ analysts (source Reuters). Net profits for the group were of 1,385 billion euro, down 9% compared to 2019.

Leather Goods division

The Leather Goods and Saddlery division had the best performance. It generated more than half of the total revenue and closed the year down with just -4.8% at constant rates. The result was achieved through a robust acceleration during the October – December period (+18%), which “reflects the demand absorbed and the gradual recovery of deliveries”, reads Hermès’ statement. In the same document, the brand highlighted the investments made to increase production and align knowledge. Even during a difficult year such as 2020, Hermès increased its workforce by 1,183 people, half of which were from the vertical integration of its supplier J3L.

The bonus

Hermès employed 16,600 people at the end of 2020, 10,383 of which located in France. The brand will give a 1,250 euro bonus to all employees in 2021, to compensate for their effort and contribution to the brand’s results. As far as the future goes, Hermès remains very positive. “The group remains busy and at work, adapting progressively to the conditions imposed by health and public authorities  – states the official note -. In the medium term, even with economic, geopolitical and monetary uncertainties around the world, we confirm our ambitious objective to grow revenue at constant rates”.

Picture from hermes.com (by i.mage_lab)

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