How the Paris Attacks Impacted Hermès's Business

Silk and textiles were hit hard, while ready-to-wear hasn't really wavered under new Creative Director Nadège Vanhee-Cybulski.
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An Hermès store in Paris. Photo: FRANCOIS GUILLOT/AFP/Getty Images

An Hermès store in Paris. Photo: FRANCOIS GUILLOT/AFP/Getty Images

"Remarkably well" is how Hermès said its sales in France for 2015 fared in light of the devastating terrorist attacks that hit Paris on Nov. 13 of last year. Indeed, they were up 6 percent over the year before, contributing to an overall 9 percent jump in Europe — the luxury brand's second-best performing region after Japan, where sales were up 18 percent. America was up 7 percent. Overall, sales were up 18 percent for the year (8 percent excluding currency fluctuations).

The Paris attacks did in fact have a negative impact, most notably on the brand's silk and textiles (i.e. scarves) business, down 1 percent, which Hermès said was "hit hard" by a slowdown in tourist shopping following the events. Leather goods and saddlery performed best, with an increase of 13 percent. Growth slowed somewhat in ready-to-wear and accessories, which is significant as fall 2015 marked the debut of Creative Director Nadège Vanhee-Cybulski, who joined the house from The Row last year. Sales there were up 8 percent for the year versus a 15 percent jump in 2014. Still, Hermès said sales "benefited" from Vanhee-Cybulski's debut collection, and that shoes performed better than usual as well.

A look from the Hermes fall 2016 collection. Photo: Imaxtree

A look from the Hermes fall 2016 collection. Photo: Imaxtree

Profit was the big success story for Hermès in 2015: Operating margin reached 31.8 percent, up from 2014's 31.5 percent, though below 2013's all-time high of 32.4 percent. Operating profit rose 19 percent to 1.54 billion euros ($1.7 billion). That margin should continue to improve, as CEO Axel Dumas reportedly told investors that the company plans to raise prices by about 3.5 percent in Europe this year.