Hermès Continues Double-Digit Growth in China but Drop in Hong Kong

Oct 25, 2019 | Biz, China, Hong Kong, News, Style

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by AFP

French luxury goods maker Hermes said Thursday that its sales accelerated in the third quarter thanks in particular to China despite the unrest in Hong Kong.

For the three months to the end of September the maker of leather bags and silk scarves saw sales rise 18.2 percent to 1.7 billion euros ($1.9 billion).

Excluding the effects of exchange rates and other factors such as the number of stores, growth still came in at 15 percent.

The company’s financial director, Eric du Halgouet, described the quarter as an exceptional performance with double-digit sales growth in all regions of the world.

In Asia, which alone accounts for half of sales, the growth was just over 20 percent.

“There was no disruption to the trend in continental China,” said du Halgouet.

In particular he noted Hermes was attracting younger clients thanks to embracing e-commerce.

Hermes’ site is “attracting new clients and is enjoying faster growth than our shops,” said du Halgouet, adding it also brought the brand added visibility.

He acknowledged sales had faltered in Hong Kong, where pro-democracy campaigners have staged demonstrations for months that have occasionally turned violent and forced Hermes to close its stores.

However du Halgouet said sales for the year to date remain up.

Sales in Paris shops have also rebounded following “Yellow Vest” street protests, he added.

The firm’s leather goods, which account for nearly half of sales, saw sales rise by 11.5 percent and Hermes has plans to launch additional workshops.

Shares in Hermes rose 2.1 percent in morning trading while Paris’ blue-chip CAC 40 index was up 0.5 percent.