March 29, 2012

Hermès, Record-Sales of €3 billion in 2012

According to Agence France Presse, luxury fashion house Hermès has recorded record sales of €2,84 billion in 2011. The company created by Thierry Hermès in 1837 has doubled its  turnover since 2005 and it is expected that this year,its income will exceed the €3 billion milestone.

The current profit of the company is €580 million, with the expected operating margin exceeding 30% in 2012, going over the €421,7 million earned in 2011, year in which profit has risen by a percentage of 46 points.

On the stock exchange market, the value of Hermès shares has dropped within the last weeks, because of the concerned attitude of investors towards the forecasts regarding declining sales in Asia.

The Hermès House benefits from an excellent exposure on the Asian continent, market which has brought in more than a quarter of its income. Stock market chartists, however, point towards a decline in sales in this sector for the year to come.

In spite of this, the LVMH group, led by billionaire Bernard Arnault, believes in the House’s selling power, currently owning a share of 22.28% of the company. Ever since late 2010, when the conglomerate has first started buying shares on the Stock Market, there has been a constant feeling of cocern looming within the French fashion house, regarding the integrity of the brand, given that it has prided itself since the beginning for being a family business.

Patrick Thomas, CEO of Hermès, has stated that the brand’s vision and strategy has not and will most certainly not be influenced by this. Moreover, the conglomerate itself has denied any type of „hegemonic” behaviour on its part.

Thomas has also stated that for 2012, the French brand’s primary goals include investments of up to €250 million and a recruiting plan of 715 people, putting an emphasis on the fact that the company’s current objective is keeping its independence intact, rather than focusing on rentability.