Luxury goods company Hermès reported that the group’s consolidated revenues passed the €5bn ($5.4bn) mark to reach €5,202m ($5,643m) last year – +7.5% at current +7.4% at constant exchange rates.

 

At the same time, recurring operating income was up 10% to €1,697m ($1,841m) representing 32.6% of sales, while net profit rose by 13% to €1,100m ($1,193m).

 

The company said: “The solid rise in revenue recorded in 2016 in group stores (+8%) was driven by growth in all geographies. Hermès continued to improve the quality of its distribution network, with four store openings and several renovations and extension works.

 

“Japan (+9%) performed well thanks to its selective distribution network, despite the strengthening of the Yen and a high comparison basis. Asia, excluding Japan (+7%), pursued its growth, particularly with extensions of the Liat Towers and Takashimaya stores in Singapore and store openings in Macao, at Hong Kong Airport and in Chongqing in China.

 

HONG KONG AND MACAO STILL ‘CHALLENGING’

 

“In Mainland China, the group continued to develop even though the context remains challenging in Hong Kong and Macao. America (+7%) achieved solid growth, in a contrasting environment. The stores in Hawaii and Philadelphia were renovated and extended at the end of the year.

 

“Europe (+8%) posted growth, performing well which confirms the resistance of the group, despite the impact of recent events. After being extended and renovated in October, the Bocca di Leone store in Rome is experiencing a great success. France (+5%) displayed solid growth.”

 

Hermès added that growth over the year was driven by the success of leather goods and saddlery products, underlining their role as the mainstay of the group, although other product sectors including silk, ready-to-wear and the accessories division were also reported to have performed well.

 

Commenting on the sales breakdown in 2016, the company added: “Growth in leather Goods and saddlery (+14%) was remarkable, thanks to the success of the collections and the diversity of models, particularly the Constance, Halzan and Lindy bags, alongside the Birkin and Kelly.

 

HERMÈS SALES RESULTS IN 2016

“Development was supported by the sustained pace of deliveries and production, gaining from the capacities of the three new sites in Charente, Isère and Franche-comté. investments for a third site in this latter region continued.

 

“The ready-to-wear and accessories division was stable over the year and posted a 4% increase in the fourth quarter, driven by the success of the latest women’s ready-to-wear and fashion accessories collections, particularly shoes.”

 

The luxury company also pointed to a +9% rise in the Perfumes division driven by ‘the success of Terre d’Hermès, the launch of Galop d’Hermès’, and the latest creations, including the colognes Eau de Néroli Doré and Eau de Rhubarbe Écarlate.

 

However, Hermès’ watch business (-3%) still suffered in a ‘challenging market’.