In a development that underscores the revival of the economy, sales at Birkin handbag maker Hermes during the second quarter more than doubled from the previous year, especially in Asia and the US markets, with shoppers flocking its stores.
The luxury goods industry, which suffered an unprecedented sales contraction in 2020, is seeing a sharp bounced back in 2021, with Hermes’ peers including Kering and LVMH also benefiting the economic resurgence.
In a statement Hermes said, sales at constant currencies were up 127% at $2.55 billion (2.15 billion euros), a rise of 33% above where they stood in the first half of 2019, before the onset of the coronavirus pandemic.
It reported an operating margin of 41% of sales, matching that of its French rival and industry leader LVMH’s fashion and leather goods division.
Calling the results as being exceptional, Axel Dumas, the company’s executive chairman said, unlike peers, Hermes had not postponed investments during the pandemic and had kept renovating stores and opening new ones, including one in Detroit in June.
So far the group has hired nearly 400 people this year.
In a statement the group reported, sales in the first six months in Asia excluding Japan, rose by 87%, while sales in the Americas surged by 115%.
According to analysts, the industry may be heading for a slowdown in the second half of this year, as comparisons with 2020 become tougher.
“Hermes could also be at a disadvantage because of its self-imposed production limits”, opined HSBC. Historically the group has a waiting list for its most iconic wares.
Hermes does not set production levels to reach a certain turnover but to ensure it can deliver the best quality, clarified Dumas.
($1 = 0.8419 euros)