Hermès Q1 Sales Fall 6.5% with Asia and Europe Hardest Hit

Hermès International reported a 6.5 percent drop in sales over the first quarter, taking the hardest hit from the coronavirus crisis in Asia and Europe.

Striking a tone of confidence, the luxury firm said that operations are gradually resuming and that it has kept a basic salary for its employees around the world without drawing on state assistance. The company will propose a dividend—which is has slightly reduced to 4.55 euros from 5 euros—at the shareholder meeting Friday.

“The solidity of our craftsmanship model, the appeal of our objects, and the efforts made by all the Hermès teams are key assets that will help us confidently overcome the major uncertainties that the first period has brought,” said Axel Dumas, executive chairman of Hermès.

Sales for the quarter came to 1.5 billion euros, a decline of 7.7 at constant rates, as the spread of COVID-19, which has closed stores across the world, brought years of heady growth to a screeching halt.

Sales in Asia were 814.5 million euros, down 6.7 percent at constant currencies, with growth in Japan helping to mitigate the drop during the period, when stores in Mainland China were closed from the end of January. Stores in China have since reopened and activity is again on the upswing, the company said.

In Europe, where stores have been closed since mid-March, sales were down 10 percent at constant rates to 403.5 million euros. The decline was less stark in the Americas, even if all e-commerce has been halted in the U.S. since March 20, down 6.3 percent at constant currencies, to 258.5 million euros. In terms of activities, silk and textiles where hit the most, down 19.2 percent at constant rates, while leather goods and saddlery products proved more resilient, down 6 percent.

This story first appeared on WWD.

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