Company sheet HERMES INTERNATIONAL
(AOF) - =/ Key Points /=
- Luxury family group created in 1837 of medium size but with a worldwide reputation, with 320 exclusive stores in the world;
- Sales of €6.4 billion, split between Europe for 25% including France for 10%, Japan for 13%, Asia-Pacific excluding Japan for 46%;
- One of the most diversified brands in the world of luxury goods, from leather goods (50% of sales), to clothing and accessories (22%), including silk and textiles (7% ), perfumes (4%), watches (3%), tableware, etc.;
- Business model based on vertical integration, the "power of the hand", the maintenance in France of the know-how of the more than 6,000 craftsmen who manufacture 7/10ths of the products sold, a territorial anchorage and three-thirds sharing of the value created (investments, shareholders, reserve);
- Company controlled by family shareholders (66.6% of capital and 78.2% of voting rights) of which Axel Dumas and Henri-Louis Bauer (representative of Emile Hermès) are general partners;
- Healthy financial structure with €7.4 billion in equity, cash of €4.2 billion, combining maintenance of operational investments and generosity towards shareholders.
=/ Issues/=
- Growth strategy based on an exclusive distribution network, reinforced by the regular opening of new stores and on the professional quality of employees;
- Innovation Strategy
- inherent in the creative profession, with Petit H, Hermès Horizon,
- deployment of an e-commerce platform available in 29 countries, use of the digital flagship for omnichannel sales paths, etc.;
- Environmental strategy organized around 2 ambitions:
- by 2020, 50% reduction in carbon emissions from own activities, compared to 2018 and renewal of the commitment to the 3rd Livelihoods carbon fund,
- Ability to resist fads and economic contexts thanks to its "classic" image and its timeless character;
- High negotiating power, strong ability to increase prices thanks to a very high-end positioning, strategy of securing supplies and active policy of buying back concessions, margin support factor.
=/ Challenges /=
- Change in price differentials – of 50% – between Europe and the rest of the world;
- Risks of a decline in sales due to taxation of the "rich" in China;
- Impact of 2020 investments in digital and store openings;
- Impact of the pandemic: 77% increase in sales in the 1st half, driven by Asia and North America, and tripling of net profit;
- Medium-term objectives of “ambitious revenue growth at constant exchange rates”;
- Dividend of €4.55 followed by a first installment paid in March 2021.
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