Hermes, the renowned French luxury brand famous for its iconic Birkin bags, announced impressive results for the third quarter of 2024, defying a wider downturn affecting many of its competitors in the luxury market, particularly in China.
Hermès group’s consolidated revenue amounted to 11.2 billion euros at the end of September.
The company reported a substantial 3.7 billion euros ($3.99 billion) in revenue for the three months ending in September, marking an 11.3% increase at constant exchange rates.
In light of ongoing global economic challenges, Hermes remains optimistic, maintaining its medium-term guidance for revenue growth at constant exchange rates. The company reiterated its commitment to hiring, showcasing confidence in its long-term strategy.
While the luxury sector faces a slowdown, Hermes continues to thrive, thanks to its timeless designs and meticulous management of production and inventory.
These strategies have reinforced the brand’s exclusivity, allowing it to maintain its position as a leading performer in the luxury industry.
High-end handbags, including the coveted $10,000 Birkin, remain out of reach for most consumers, ensuring that sales are predominantly driven by affluent shoppers less affected by economic fluctuations.
Despite the overall decline in luxury sales across the region, Hermes reported modest growth of 1% in the Asia-Pacific market, excluding Japan.
| Region/Segment | Sales Growth (%) |
|---|---|
| Asia (excluding Japan) | 7% |
| – Contributing countries | Korea, Singapore, Australia, Thailand |
| – Impact of Greater China | Downturn in traffic, high base last year |
| Japan | 23% |
| Americas | 13% |
| Europe (excluding France) | 18% |
| France | 14% |
| Leather Goods and Saddlery | 17% |
| Ready-to-Wear and Accessories | 15% |
| Silk and Textiles | 2% |
| Perfume and Beauty | 7% |
| Watches | -6% (decline due to high comparison base) |
| Other Sectors (Jewelry, Home Universe) | 17% |
Eric du Halgouet, Hermes’ Executive Vice President of Finance, noted that while consumer traffic in China has remained subdued since the Chinese New Year, there has been no further decline in performance.
To adapt to the situation, Hermes has focused on increasing average transaction values, successfully selling premium products such as jewelry, leather goods, and ready-to-wear collections for both men and women.
In a strategic move to solidify its presence in China, Hermes inaugurated a new store in Shenzhen’s Mixc shopping mall on Wednesday and has plans to open a flagship store in Beijing next year.
This commitment to investment in the Chinese market reflects the brand’s confidence in its growth potential, even amidst challenges.
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