In much-needed news for the beleaguered luxury industry, Hermès is reporting its first signs of growth in months.
According to the brand’s Q3 financial disclosures, the famous French house outpaced expectations with $2,127,150,000 in sales, a 4.2 percent increase (or 6.9 percent if viewed at constant exchange rate) with in-store sales up 12 percent. As was the case with all of its peers, the second quarter of 2020 was a dire one that saw sales slump dramatically. Overall revenue remains down 14 percent as a result, but this uptick, however small, is a meaningful one for the brand as it plots its course for the future.
“In 2020, we are seeing the affirmation of major strategic commitments with social and environmental responsibility, the digitalization of uses and lifestyles, as well as positive market dynamics in Asia,” said executive chairman Axel Dumas in a statement. “Taking into account these profound and lasting changes allows us today to remain confident despite a still uncertain future.”
— WWD (@wwd) October 22, 2020
Most of the sales were driven by strong demand in the Asian market which has rebounded more swiftly than its Western counterparts thanks in part to stricter lockdowns. The brand also started digital sales platforms in Hong Kong, Macao and South Korea, which are credited with creating new revenue and acquiring new customers. During the height of the initial Covid-19 lockdown, Hermès executives were surprised to learn that nearly all revenue was generated digitally and that most online sales went to customers who’d never purchased anything from the storied brand before.
But a key part of its recent success is Hermès’ aggressive expansion into new territories and the cementing of its presence in existing ones. This month alone, it unveiled new boutiques in Madrid and Stockholm with others in Japan, Dalian, China and Moscow opening earlier during the third quarter. The label’s Denver store was also reopened after being temporarily shuttered for renovations. With most unable to travel and spend as tourists, a huge source of revenue for every luxury brand, the convenience and immediacy of local shops could make all the difference as the world winds its way to a new normal.