PARIS — Production capacity is the challenge for Hermès International in 2012, as it races to keep up with demand for its Birkin bags and silk scarves.
The French luxury brand beat its sales target in 2011 on the back of a better-than-expected performance during the crucial year-end holiday season, and it expects revenues to continue growing at a double-digit rate this year, depending on how well it can keep pace with demand.
“We are approaching 2012 with confidence,” Mireille Maury, managing director of finance and administration at Hermès, told WWD. “Demand is very strong and our sales growth depends on our capacity to respond to it.”
Hermès is opening two leather goods factories in France this year and plans to hire at least 600 additional people, more than half of them in its workshops, to cope with bottlenecks that have curbed sales of some items, such as leather goods.
Maury reiterated the firm’s medium-term target of posting a 10 percent annual revenue increase at constant exchange rates. Hermès did significantly better than that in 2011, with a sales increase of 18.3 percent, exceeding the company’s most recent forecast of a 15 to 16 percent bump.
The firm, which will report full results on March 22, again raised its guidance for last year’s operating margin, which it now expects to exceed 30 percent of revenues in 2011 versus 27.8 percent in 2010.
“[Last year] was all the more exceptional in that it came after a very strong 2010, meaning that in the space of two years, sales grew by more than 40 percent at constant exchange rates,” said Maury.
The data confirmed that luxury sales maintained momentum heading into the new year, despite fears of a fresh recession in the euro zone and signs that growth rates are normalizing in China.
LVMH Moët Hennessy Louis Vuitton, which owns a 22.3 percent stake in Hermès, said revenues advanced 20.4 percent in the three months to Dec. 31, while Burberry and Compagnie Financière Richemont posted gains of 22 percent and 24 percent, respectively.
Hermès reported revenues rose 15.8 percent during the period to 852.5 million euros, or $1.15 billion. Stripping out the impact of currency fluctuations, sales were up 14.3 percent in the fourth quarter. All dollar rates are calculated at average exchange rates for the period concerned.
Revenues from its network of directly owned stores rose 15.5 percent in the fourth quarter. Sales of ready-to-wear and fashion accessories were up 28.8 percent, while silk and textiles registered a 15.5 percent increase. Leather goods and saddlery rose by 10.2 percent, hampered by insufficient production capacity.
Wholesale revenues were up 14.3 percent in the fourth quarter, with perfumes up 17.1 percent, watches posting a 14.9 percent increase and tableware rising 7 percent.
In regional terms, non-Japan Asia again registered the best performance in the quarter, up 26 percent, followed by Europe — excluding France — which posted a 19.4 percent rise. In the Americas, sales rose 16.7 percent in the fourth quarter.
Hermès said it would pay an interim dividend of 1.5 euros, or $1.94, per share on March 1. In 2011, the company bought back a total of 1,292,215 shares worth 286 million euros, or $323.6 million.
Hermès opened 13 units, renovated or enlarged eight stores and took over four concessions. It plans to open or renovate another 15 stores in 2012, with planned openings in Taiwan and Abu Dhabi in April.
“What he has done at Vuitton is really exceptional,” said @gameofthrones’ actress Gwendoline Christie on @mrkimjones’ final show for @louisvuitton. “He has rebooted luxury in terms of making it commercial, viable and contemporary. And most importantly artistic. He has never compromised his artistic vision for the sake of commodity.” (📷: @zefashioninsider)
After seeing a demand for men’s wear from its customers, British contemporary women’s wear label @ariesarise has added a men’s wear component and will launch a unisex collection with @mrporterlive. The 20-piece collection includes jackets, denim, logo T-shirts and more with deconstructed ‘90s vibes. Set to launch on January 18, you can shop the pieces on Aries’ website and on mrporter.com. #wwdfashion
“And so spending so much time with a character who thinks like that, inevitability you try and analyze yourself and go back and think about your own demons and dark chapters that you had in your life,” says @thedanielbruhl of his role in TNT’s “The Alienist.” The show, set in the Gilded Age of New York, also stars Dakota Fanning and Luke Evans. Head to WWD.com to read about how 39-year-old Brühl prepared for the role and why he thinks the show is so relevant to today #wwdeye ( 📷: @Eriktanner)
Now that Celine Dion’s collection has topped $10 million in sales, the pop superstar, fashion icon and newly-minted industry player is eyeing growth in Asia. Read the full report by @tiffanyap, link in bio. #wwdnews #celinedion
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
Among the familiar faces at @off____white’s show was a surprise figure: Japanese artist @takashipom, pictured here on Wednesday morning. Other show-goers included @jerrylorenzo, who spoke about his upcoming project: a @nike collaboration for back to school, with designs inspired by his childhood on the West Coast. Sitting in the front row were Future, Don Crawley, @miguel and more. See the rest of the photos on WWD.com #wwdeye (📷: Stephane Feugere)
According to @laurentsai, former “Terrace House: Aloha State” cast member, she didn’t know she was auditioning for the Japanese version of “Real World.” “I was telling a couple of my friends and someone’s like, ‘That sounds a lot like Terrace House.’ I was like, ’No it can’t be.’” Turns out, it was. But Tsai isn’t just a reality star — she’s an illustrator who has worked with Starbucks Japan and most recently, she’s dipping her toes into the fashion world. Head to WWD.com to read about her time on the show, modeling and her art. #wwdeye (📷: @danieldorsa)
More changes are coming to New York Fashion Week: Beginning with the spring 2019 collection, @alexanderwangny will move his New York show to June from September, adopting a biannual schedule with collections shown in June and December. Additionally, the @cfda is planning for an official summer/winter fashion season taking place as soon as June and December 2018. Read more about the upcoming changes on WWD.com. #wwdnews #wwdfashion (📷: @slovekinpics)