PARIS — Outpacing expectations, Hermès International posted 4.2 percent growth in third-quarter sales, driven by strong demand in Asia, affirming the region’s role as a crucial market for the luxury sector.
“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 Axel Dumas, executive chairman of Hermès. The company has also been bulking up its global retail network at a brisk pace, adding new stores while renovating and expanding existing ones.
Sales for the three months ended Sept. 30 came to 1.8 billion euros, an increase of 6.9 percent at constant rates, lifted by Asian demand, which offset declines elsewhere in the world.
Sales in Asia were boosted by appetite in mainland China, South Korea, Australia and Thailand, the company said, touting improvements in Hong Kong and Singapore as well. Online sales platforms were rolled out in Hong Kong, Macao and South Korea, which also served to spur growth. Growth in Japan was more subdued, up 11.1 percent to 244.3 million euros.
In Europe, the worst-performing market, sales dropped 15.2 percent at constant rates to 448.1 million euros, reflecting that tourist flows to the region have dried up. The decline in the Americas came to 5.2 percent to 269.8 million euros, with Hermès citing a store closure in Hawaii for renovations as weighing on business.
Sales from the company’s leather goods and saddlery division grew 7.8 percent at constant rates,
Despite ongoing uncertainty, with the impact of the coronavirus pandemic still difficult to assess, Hermès said it targets revenue growth at constant exchange rates in the medium term.
The quarterly performance outpaced expectations, with HSBC estimating 0.4 percent growth at constant rates.
Earlier this week, LVMH Moët Hennessy Louis Vuitton beat expectations with a sharp improvement in sales trends over the quarter, posting a 7 percent decline in organic revenues, raising hopes for a recovery of the overall luxury sector.
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