Hermès exceeds $5B in revenues for fiscal 2016

Hermès’ Objets Pour La Vie campaign

France’s Hermès saw its leather goods and saddlery category grow by 14 percent for fiscal year 2016, a financial period that demonstrated the house’s industry clout.

Best known for its Birkin and Kelly handbags, Hermès’ leather goods saw tremendous success for the year, all of which was supported by its sustained pace of deliveries and production. During fiscal 2016, Hermès added three new leather goods manufacturing sites to its portfolio, bolstering its production capabilities further for a year of excellence performance.

Saddle up
Hermès’ recorded an operating margin that hit an all-time high for the brand of 32.6 percent of sales.

The French maison also had consolidated revenues that exceeded the 5 billion euro mark, reaching a total of 5.2 billion euros, or $5.6 billion. The jump from fiscal year 2015 is a 7.5 percent increase at current exchange rates, and 7.4 percent at constant rates.

Hermès’ recurring operating income increased by 10 percent to an amount of 1.6 billion euros, or $1.7 billion. Recurring operating income was 32.6 percent of sales.

Also, Hermès’ net profits increased by 13 percent for a total of 1.1 billion euros, or $1.2 billion.

On the retail front, Hermès recorded 8 percent growth at stores in all geographies. Throughout fiscal year 2016, Hermès worked on new openings and renovations.

Fiscal 2016 also brought forth the first Hermès pop-up shop to be housed in a department store. In the past, Hermès has preferred renting its own space for a temporary point of sale.

The year-long Hermès shop-in-shop is dedicated to the brand’s accessories and is found at U.S. retailer Nordstrom’s downtown Seattle flagship (see story).

By region, Japan saw a 9 percent increase while the rest of Asia saw growth of 7 percent. Although Hermès saw positive performance across Asia, particularly Singapore, the brand acknowledges the ongoing challenges of Hong Kong and Macao.

Hermès is looking toward the future; Image features Hermès’ Cape Cod watches 

In the U.S. Hermès saw solid growth of 7 percent while Europe performed well, demonstrating the brand’s resistance to political and social tensions due to recent events. Europe posted 8 percent growth and Hermès’ home market of France displayed a 5 percent.

While Hermès’ leather goods performed the best out of its available categories, the brand’s ready-to-wear and accessories  category was stable for fiscal year 2016. The category saw a 4 percent increase in the fourth quarter of 2016.

Perfumes performed well with growth of 9 percent, but as with most other luxury houses, the brand’s watch division declined 3 percent.

Regarding its outlook for fiscal 2017, Hermès plans to “continue its long-term development strategy based on creativity, maintaining control over know-how and singular communication.”

from Apparel and accessories – Luxury Daily https://www.luxurydaily.com/hermes-exceeds-5b-in-revenues-for-fiscal-2016/
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