French luxury group Hermès posted Thursday, October 24, a jump in third quarter sales, bucking the overall gloom in the sector caused by falling sales in China. The luxury house, famous for its leather bags and silk scarves, saw overall sales rise 10% to €3.7 billion in the July to September period.
China is the world's biggest spender in the luxury sector, accounting for half of global sales. But as its post-pandemic recovery falters, consumption has flagged, sending jitters through the industry.
"Hermès stands out from other big groups," Hermès' chief financial officer Éric du Halgouet told journalists. Its main competitors, the world's top luxury group LVMH and Kering (Gucci and Yves Saint Laurent) both reported falling third quarter sales, with drops of 4.4% and 15% respectively.
In Hermès's greater China region, which includes Macao and Taiwan, "there was no reversal in the trend" of sales growth, said du Halgouet. The greater Asia region, which excludes Japan, posted 0.6% quarterly growth "despite the downturn in traffic in Greater China observed since the end of the Chinese New Year, and a high base in the third quarter last year," the company said in a statement.
Du Halgouet said the drop in footfall in Chinese stores was being made up for in increased spending per client, in particular on jewelry, leather goods and ready-to-wear clothing. Hermès also recently opened a 1,000 square-meter boutique in Shenzen and has plans to open two others in Shenyang and Beijing.
The luxury group saw double-digit sales gains in its other major markets, including an 11% rise in the Americas and 18% increases in Europe and Japan. Du Halgouet said that sales in these regions were continuing at the same tempo as the fourth quarter got underway in October. Sales of leather goods, Hermès's top segment, rose by 12.7% to €1.57 billion. Clothing and accessories rose by 12.1% to €1.13 billion.
While CEO Axel Dumas evoked last month in a Financial Times interview the possibility of Hermès launching into haute couture, du Halgouet said it wasn't a project for the company in the short term but it could be added to the group's overall strategy.