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French luxury brand Hermes profits from strong demand in APAC

Hermes, a luxury fashion label known for its handbags and silk scarfs, reported a 10% increase in sales for the fourth quarter last year, with revenue in Asia Pacific rising at faster as compared to the previous three months. Meanwhile, its net profit also increased by 15% to US$1.6 billion, according to Reuters.

Hermes chief executive Axel Dumas said that globally, all its divisions including watches and perfumes, were still “performing well” in the first few months of 2019 in terms of sales volumes. However, increased production costs has caused Hermes to bump up its prices worldwide by 3% this year. Quoting Dumas, Reuters reported that Hermes is “one of the high-end labels still profiting from thriving Chinese demand and a mostly benign industry backdrop globally”. Dumas also added that there is no change in sales trends despite fears that the US-China trade war will hurt Chinese demand.

The 2019 China Luxury Forecast report released by Ruder Finn and Consumer Search Group recently revealed the winning brands for various luxury goods categories in Mainland China and Hong Kong in terms of brand awareness and purchases.

In handbags and leather goods category, Hermes, Gucci, and Coach top the list in Mainland China. Gucci, Louis Vuitton, and Hermes are the top three brands that surveyed consumers purchased last year in both Hong Kong and Mainland China.

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