Hermes Experiences a 15% Growth in 2024, Resulting in a $4,700 Reward forEach Employee
Amidst a deteriorating 2% personal luxury market in 2024, with mere one-third of luxury brands managing growth, the French powerhouse, Hermès, managed to surge a remarkable 15% at constant exchange rates, reaching an impressive $15.2 billion (€16 billion). The growth was so substantial that even after a deceleration in the second and third quarter, the brand still saw an impressive 18% surge in the fourth quarter, amounting to $4 billion (€4 billion). Despite luxury giants like LVMH and Kering dropping 2% and 12% respectively, Hermès' executive chairman, Axel Dumas, expressed gratitude to the team and rewarded all 25,000 employees with a $4,700 year-end bonus (€4,500).
The brand's solid performance is largely attributed to its unwavering focus on quality, creativity, and savoir-faire. These core values, along with its resilience and agility, have proved crucial in an unstable economic and geopolitical context. The impact of currency fluctuations was significant, negatively impacting revenues by $246 million (€235 million), but Hermès' consolidated net profit still grew by 7% to $4.6 billion (€4.8 billion).
Geographically, Hermès' performance was robust across the board. Europe, its second-largest market, grew by 17%, while Japan, a key market, saw a booming 23% growth. Asia, Hermès' top market, with revenues of $8.5 billion accounting for more than half of its total revenues, also contributed significantly to the growth. Despite a luxury market decline of 18-20% in China, Hermès still managed to grow by 10% overall. The Middle East, which represents less than 5% of Hermès' annual revenues, witnessed a double-digit growth last year, signaling potential for further expansion.
All but one product category contributed to this growth. Leather goods and saddlery, Hermès' top performer, contributed nearly a quarter of revenues and saw an impressive 18% growth. Ready-to-wear and accessories, the second-largest sector, also grew by 15%. The other sectors, including jewelry and Hermès home products, combinedly grew by 17%. Despite a modest 4% growth in silk and textiles and a 4% decrease in watches, overall, Hermès remains an influential player in the luxury market.
The brand's outlook for 2025 remains optimistic, with an "ambitious goal for revenue growth," despite the prevailing economic, geopolitical and monetary uncertainties. With its strong brand identity, strategic expansion, and commitment to craftsmanship, Herrmes continues to pave its unique path in the luxury market, setting itself apart from other luxury brands.
[1] Source: Fung Global Retail & Technology[2] Source: Bain & Company[3] Source: Financial Times
Hermès' 2024 earnings doubled compared to 2023, demonstrating its exceptional performance in the luxury market. This remarkable growth in earnings was underpinned by a revenue increase of 15% in 2024, making Hermès one of the few luxury brands that managed to grow in a deteriorating market. Looking ahead to 2025, Hermès has an ambitious revenue growth outlook, reflecting its confidence in its strategic expansion and commitment to craftsmanship.
