New women's collections boost sales of Silks & Textiles, Hermès

08 Mar '11

4 min read

Hermes announces their financial results for the year 2010.

During the Supervisory Board meeting on 3 March 2011, Management presented the audited accounts for 2010, with sales of 2,400.8 million euros, up 25.4% (+18.9% at constant exchange rates) and operating income of 668.2 million euros, up 44.3%. “This performance reflects the quality of our corporate model and the efficiency of our staff who implement it” Patrick Thomas declared.

Harmonious growth in regions and sectors
Sales in the group's own stores were up 31% at current exchange rates or 24% at constant exchange rates. The group continued to develop its distribution network, with 13 new branches opened and 9 others renovated or enlarged.

Wholesale revenues were up 3% for the full year at comparable exchange rates.

In Europe (+18%), all countries performed strongly. A new Paris store was opened on Rue de Sèvres at the end of the year. Great interest was aroused by the originality of its interior architecture and the space devoted to home interiors. Elsewhere in Europe, the network was extended with a new branch in Amsterdam, while three other stores were renovated or enlarged. In the Americas (+24%), growth was sustained throughout the year, particularly in the group's own stores (+28%), boosted by the first Hermès store devoted to men, which was opened on Madison Avenue, New York, at the start of the year.

In Asia, sales rose 19% for the full year. In Japan, sales were virtually stable. Growth in other countries (+38%) was driven by strong momentum in mainland China, Macao and Hong Kong. The extension of the network continued, with 10 new branch openings, including four in China.

Sales of Silks & Textiles grew 19%, boosted both by new women's silk collections, which were expanded to include exceptional new products in cashmere and silk, and by the increasing appeal of the new products to young customers.

Driven by small leather accessories and leather bags, where demand remained very strong, Leather Goods & Saddlery recorded growth of 21% in 2010.

Ready-to-Wear & Fashion Accessories (+18%) benefited from new ready-to-wear collections and growth in fashion accessories. In Perfumes, (+16%) sales were boosted by the successful launch of Voyage d'Hermès in March and by Terre d'Hermès, which continues to enjoy success year after year.

Exceptional growth in earnings and cash
Operating income rose 44.3% to 668.2 million euros from 462.9 million euros in 2009. The operating margin rose by 3.6 percentage points to 27.8%, the best performance recorded by the group since it went public in 1993.

Consolidated net income (421.7 million euros against 288.8 million euros) and net income per share grew by 46.0% compared with 2009.

Thanks to a 42.5% increase in operating cash flows and a significant reduction in the working capital requirement, net cash increased by 321 million euros to 829 million euros at the end of 2010 compared with 508 million euros at the end of 2009.

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