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Luxury industry: Investing in high fashion or high return?
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Hermes: a money printing machine through time

Galaxy Paris joined discussion · Feb 27, 2023 20:29
As a typical representative of Webelos goods, Hermes's revenue growth rate declined only in 2020, the worst year of epidemics, and returned strongly.
Hermes: a money printing machine through time
The fiscal year 2022:
Sales jumped 29% year-on-year to €11.602 billion, topping €10 billion for the first time in its history.
Operating profit jumped 40.5% to 4.697 billion euros, with gross margin reaching 70% and net profit jumping 29% to 3.367 billion euros.
In the fourth quarter, when luxury consumption in China was stagnant, revenues achieved a substantial 26% increase to 2.991 billion euros, far outpacing LV and Gucci. (During the same period, sales in the fashion and leather goods division, where LV is located, increased by 10%, while Gucci fell by 15%.)
Hermes: a money printing machine through time
By Business
Handbag and leather goods division sales jumped 21.3% to 4.963 billion euros, accounting for 42.7% of total revenue, down from 50% previously (some friends responded, also from higher requirements for distribution)
Sales of ready-to-wear accessories jumped 42% to 3.152 billion euros
Silk textiles jumped 25.8% to 842 million euros
Fragrance and beauty up 16.4% to €448 million
Watches jumped 54.2% to €519 million.
Hermes: a money printing machine through time
By region
Asia Pacific was the number one market, with sales jumping 27.4% to €6,657 million, contributing 57% of the Group's revenue.
The USA was the fastest-growing market in the United States, with a 46.6% year-on-year jump to €2,138 million. There are already 33 stores in the US.
Europe, which has its home base, also jumped 21.5% to 2.6 billion euros, and ✔️ the rest of the world jumped 32.5% to 207 million euros.
Expanded capacity (human resources)
the latest headcount of 19,700 employees, with 2,100 added last year. CEO announced a 4,000 euro bonus to all employees worldwide at the end of this month to incentivize staff
Hermes's five leather goods workshops will continue to increase production capacity. Two more workshops will open in France in 2023, and a new recruitment program will be launched.
January has increased its products' prices worldwide by 10% and 30% at the beginning of the month.
Digital Marketing
Even a boss like Hermes needs to ride the speedboat of e-commerce. While continuously opening stores, it is vigorously developing online digital marketing, cooperating with major e-commerce platforms to increase exposure and attract new users while improving the stickiness of old users.
Capital Market Performance
As of the close of trading on 2/17, Hermes shares grew to 185 euros, up 38% in the last year, with an updated market capitalization of about 191.6 billion euros.
Looking at the queue of people seeking Hermes bags and the rise in the secondary market, this has become an excellent investment target.
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