The French luxury house Hermès has reported a “remarkable” near-50% jump in sales in Asia as wealthy Chinese shoppers flocked to buy its colourful silk scarves and ultra-expensive handbags.
The Parisian company, whose leather handbags can be bought on the Hermès website for £4,000-£20,000 and whose silk scarves start at £265 for a bandana, said that in the final three months of 2020, sales in its Asian business, which includes China and Korea, were up 47%, helping make up for sales lost earlier during the coronavirus pandemic.
After a tough start to 2020, sales improved and were up 16% overall in the last three months of the year, which was ahead of analysts’ expectations.
Despite the late burst, full-year sales at Hermès, which is controlled by the billionaire Dumas family, finished down 6% at €6.4bn (£5.5bn). Profits were down 9%, to €1.4bn.
The group’s executive chairman, Axel Dumas, described the figures as solid and a reflection of the “desirability of our collections and agility of our craftsmanship”.
Hermès is paying its 16,600 staff a €1,250 bonus to thank them for their commitment – a generous sum, albeit an amount that would not stretch very far in its own shops.
The company’s famous Birkin bag, named after the actor and singer Jane Birkin, and the Kelly – after the actress Grace Kelly – are among the most prized status symbols in luxury fashion.
Coronavirus travel restrictions have grounded the wealthy Chinese shoppers who are the world’s biggest buyers of designer gear.
However, with shopping sprees in London and Paris off limits, Hermès’ strong figures point to Asian consumers hitting the shops at home, as well as buying online.
The global impact of the pandemic was writ large in the geographical sales trends reported by the French company. While sales in Asia finished the year up 14%, in the US and Europe they were down by more than a fifth.
Hermès did not give any financial guidance for 2021. Dumas said the impact of Covid-19 on sales in the coming months was difficult to assess “as the scale, duration and geographic extent of the crisis evolve every day”.
The Bernstein analyst Luca Solca said to record only a 6% drop in sales after the “most horrible year for the luxury industry ever” was an outstanding result. “Hermès benefits from top desirability across borders and long waiting lists on its iconic products.”