Hermes second quarter sales plunge 42 per cent amid store closures
Luxury brand Hermes announced this morning that sales fell 42 per cent in the second quarter as the coronavirus pandemic forced it to close stores and pause production.
The French designer group, which makes the £7,000-plus Birkin bag, said revenue in the first half of the year was down 25 per cent to €2.5bn.
The 42 per cent sales drop between April and June reflects “the impact of the health crisis on the network”, Hermes said.
At the peak of the Covid-19 crisis, Hermes closed 75 per cent of its stores across the world, but has since reopened most of its sites.
“Recovery in activity remains gradual in several countries,” it said.
In mainland China, where the coronavirus outbreak began, all stores reopened in March and have reported strong sales growth.
Sales in America saw a “very gradual” recovery at the end of June and sales in Europe have been badly affected by the reduction in tourist numbers.
In a sign of confidence, the group hired an extra 300 people in the first half, mainly in production, bringing its total workforce to 15,698 employees.
Hermes said it confirms an “ambitious goal” for revenue growth in the medium term, despite growing uncertainties.
Hermes executive chairman Axel Dumas said: “This unprecedented crisis, which began at the start of the year and is still ongoing, allows us to test our business model’s strength.
“True to its values, the group has preserved jobs and maintained the basic salaries of its employees worldwide without having recourse to the exceptional governmental subsidies provided in various countries.
“I am proud of the teams’ dedication, and the courage, commitment and generosity they have shown.
“I want to thank them. The loyal clients, desirable collections, agile omnichannel network and independence of the group are the pillars that give us confidence in the future and will support our recovery.”