As new Hermès Creative Director Nadège Vanhee-Cybulski's first designs begin to trickle into stores for fall, the French luxury house has just reported its full financials for the first half of the year — the momentum she'll be tasked with keeping up.
As it first reported in July, Hermès saw a healthy sales increase of 21 percent to €2.299 million (about $2.58 million) at current exchange rates — though that's only 9 percent if you exclude the positive impact of currency fluctuations. As usual, sales were the strongest in Japan, which saw a 20 percent jump, offsetting slower growth in the rest of Asia, where sales were up about 7 percent. This is still commendable given the difficulties nearly all luxury brands are having in the region.
By category, leather goods (i.e. handbags) saw the highest growth — nothing new there — at 14 percent. Growth in ready-to-wear and accessories was also strong, at 8 percent.
The news in Friday's report is the house's profitability: Consolidated net profit was €483 million (about $543 million), a 17 percent increase over the same period last year. Operating profit grew 20 percent to €748 million ($841 million) with a high margin of 32.5 percent — one of the highest Hermès has ever reported. (This time last year, it was 32.6 percent.)
Still, Hermès warns that overall profitability for 2015 will be lower than it was last year because of currency fluctuations.
And if you were wondering about the tensions between Hermès and Jane Birkin, who recently demanded her name be removed from that iconic handbag after PETA (now an Hermès shareholder) alerted her to the inhumane practices of an alligator farm that works with an Hermes tannery — there is an update there, too: CEO Axel Dumas said at Friday's earnings presentation that the house is working with Birkin to address her concerns, reports Bloomberg. He says Hermès is investigating the farm, and he wants to show Birkin that Hermès's practices are better than most.