The luxury goods industry has entered a recovery period in the past year, and the market is enjoying good news. However, under the influence of the digital trend, the market ranking has quietly changed.
French luxury brand Hermes released a financial report that thanks to the strong and positive exchange rate of leather goods sales, 2017 net profit rose 11% year-on-year to 1.2 billion euros, recurring operating profit rose 13% to 1.922 billion euros, in line with analysts' expectations. .
Hermes released the sales data for 2017 last month, showing that the annual sales increased by 6.7% to 5.5 billion euros at a constant exchange rate. In the income scale, Gucci (special reading) was left behind in just one year, the latter Last year, revenues recorded 6.2 billion euros and over 700 million euros. In 2016, Hermes' revenue was 5 billion, and Gucci's revenue was 4.378 billion euros.
According to the financial report, in 2017, Hermès recorded revenue growth in all regional markets. During the period, the brand continued to improve its distribution network, and at the same time completed renovation work and nearly 20 new stores.
By region:
Sales in the Asia Pacific market, excluding Japan, increased 9.5% to 1.946 billion euros at the prevailing exchange rate and 11.3% at constant exchange rates, thanks to strong sales performance in Greater China and South Asia, the region has become a sales The market with the largest contribution;
The Japanese region increased by 1% to 716 million euros at the exchange rate at the time, and increased by 4.1% at constant exchange rates;
The European region grew by 6.9% to 1.799 billion euros at the prevailing exchange rate, and increased by 7.7% at constant exchange rates, with sales in France, the brand's home market, recording a 5% increase;
The United States region increased by 5,8% to 91.8 million euros at the exchange rate at the time, and increased by 4.1% at constant exchange rates;
Other regions increased by 19.8% to 716 million euros at the prevailing exchange rate and 19.9% ​​at constant exchange rates, thanks to the opening of new stores in Sao Paulo, Brazil.
By category:
Sales of the core handbags and harness division increased by 7.6% to 2.8 billion euros at the prevailing exchange rate and 9.7% at constant exchange rates. Classic handbags such as Birkin, Constance, Kelly and Lindy are still selling well;
Sales of the ready-to-wear department increased by 7.5% to 1.181 billion euros at the prevailing exchange rate and 9.4% at constant exchange rates;
Sales in the silk and textile sector increased by 3.7% to 534 million euros at the prevailing exchange rate and 5.7% at constant exchange rates. The department's products, both fabrics and designs, continue to innovate to meet the changing preferences of consumers;
Last year, the perfume department's sales rose 9.8% year-on-year to 287 million euros at the current exchange rate, and 10.1% at constant exchange rates, the most significant increase;
The Hermès watch business grew at a small rate, at 0.3% at the exchange rate of the time, reaching 157 million euros, but the watch that the brand exhibited for the first time at the Geneva show was well received by the industry;
Sales of Hermès' other businesses, including jewellery, art of living and tableware, increased by 8.6% to 365 million euros at current exchange rates and 10.5% at constant exchange rates.
Up to now, Hermès has a total of 13,000 employees and 15 production bases worldwide. The brand is expected to set up two new factories in France in 2020 to meet the rising demand for leather products for consumers and for each factory. Hire 250 leather craftsmen.
Some analysts pointed out that luxury handbags are still regarded as high-quality investment opportunities in many emerging markets. According to the "White Paper on China's Luxury Internet Consumption" released by the luxury e-commerce temple library, leather products ranked third in China's luxury consumption in 2016, ranking second only to wine and clothing.
Hermès CEO AxelDumas said in an interview that classic handbags such as Hermès Birkin, Constance, Kelly and Lindy are still selling well in Asia Pacific including China.
AxelDumas said that women's consumption growth in fashion and luxury goods is expanding, while Chinese consumers are increasingly interested in luxury crafts made by special crafts, and the purchase category is gradually expanding, and Hermes can benefit from it.
In order to better seize the gradual recovery of the Chinese luxury market, Hermès, which has always been conservative, has adopted a strategy of simultaneous online and offline expansion. In addition to the first-tier cities such as Beishangguang, the brand gradually penetrated into the first-tier cities such as Hangzhou and Chengdu in China, and it is expected to open a new flagship store in Changsha this year.
Hermes said after the release of the earnings report that the official website of China will be revised at the end of the year. On October 23 last year, Hermès opened a limited-time experience store on WeChat for the first time to sell its smart watch with Apple. In December of the same year, the brand launched four men's and women's shoes through WeChat, one of which is a platform ladies' sneakers only in China. The mainland is on sale at a price of 7050 yuan to 7700 yuan.
Mario Ortelli, senior analyst at Bernstein Research, said that e-commerce has affected 62% of luxury purchases, including online merchandise enquiries and purchases, and online sales have become the most important growth engine in the luxury industry.
However, the digitalization of Hermes is still behind LVMH and Kaiyun Group. Gucci, a luxury brand owned by Kaiyun Group, not only launches hot-selling marketing on social media every month, but its creative director AlessandroMichele has also become the most popular designer on Instagram, and has led the luxury industry for eight consecutive quarters.
After Céline, the most conservative luxury brand of LVMH, officially launched its official website with e-commerce services at the end of last year, Chanel also acquired a minority stake in Farfetch, a British luxury e-commerce company, in February, and the two companies will cooperate to develop digital services.
Millennials are a key group that redefines the direction of the luxury market in the next decade.
According to the fashion headline data, in the first quarter of last year, Gucci's growth rate exceeded the other luxury brand SaintLaurent of Kaiyun for the first time. In the quarter, revenue recorded a surge of 51% to 1.354 billion euros, an increase of 48.3%, which is 20 The strongest growth in the year, thanks to the outstanding performance of the acquired Dior fashion department, LVMH also achieved double-digit growth for four consecutive quarters last year. Last year, sales of the fashion leather goods division, which includes the core brand LV, rose 13% year-on-year to 15.472 billion euros, a significant increase of 21% at constant exchange rates.
It is worth noting that under the general trend of large luxury to seize the younger market, AxelDumas said earlier that Hermes did not deliberately cater to the preferences of young people.
As of today's press release, Hermes shares rose 0.17% to 464.8 euros per share, and the current market value is about 48.9 billion euros.
The original title "Market ranking has changed Hermes has been overtaken by Gucci for 700 million euros"
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