French luxury group Hermès shrugged off the rise in Covid-19 cases in China and increased sales by a quarter last year, with little disruption to shopper demand for products from the maker of the iconic Birkin bag even as rivals took a hit.
Hermès had an “exceptional” year with a 23 per cent jump in annual sales to €11.6 billion on a comparable basis and a similar increase in the fourth quarter, exceeding expectations, due to demand for the brand’s leather goods, watches and jewellery.
“We were very strong in China with strong growth in our numbers regardless of the quarter and including the fourth quarter,” said chief executive Axel Dumas.
“The rebound in China for us took place as soon as Wuhan reopened in 2020,” he added. “I think sometimes we use a little bit of catastrophising about the effects of the health crisis in China to explain other things.”
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Sales in the three months to December rose 22.9 per cent to almost €3 billion after analysts forecast a 17 per cent sales gain.
Hermès does not break down numbers for mainland China, but sales in the Asia-Pacific region, excluding Japan, rose about 25 per cent. It was also supported by strong sales in the United States, where the company reopened its new flagship store on Madison Avenue in New York.
Full-year profit at the group rose 38 per cent to €3.4 billion.
It comes after luxury rival Kering this week reported a fall in sales in its fourth quarter partly because of Beijing’s zero-Covid restrictions. Even industry giant LVMH, which posted record profits for 2022, suffered a dent in sales in the last quarter of the year. – Copyright The Financial Times Limited 2023
