Hermes'S Performance Increases Without Considering Price Cuts

The French luxury group Hermes International announced its profit in fiscal year 2014 yesterday. In terms of figures alone, Hermes group's annual operating profit amounted to 1 billion 730 million (10 billion 700 million yuan) US dollars, up 6.7% from last year, and its net profit amounted to 1 billion 140 million US dollars (7 billion 100 million yuan), up 8.7% over last year.

Although the number is rising, due to exchange rate fluctuations,

The gross profit margin of the group fell to 31.5% from the highest level of 32.4% in the previous year, while the "watch out" watch business in China's large-scale anti-corruption activities in 2014 also deteriorated from 1% growth in the previous year to a negative growth of 10.6%.

But at present, a depression.

On the market, Hermes is still in the upper reaches.

According to the 2014 sales figures released by the Hermes group in mid February this year, its annual revenue has exceeded 4 billion euro mark for the first time, reaching 4 billion 118 million 600 thousand euros (28 billion 130 million yuan), an increase of 9.7% over the previous year, far exceeding the 3.9% annual growth of its rival LVMH group.

On the regional level, what the Hermes group did not expect was that despite the impact of a series of events in Hongkong and the continuous progress of anti-corruption in mainland China, the Asia Pacific region maintained a two digit growth rate in 2014, an increase of 13%, of which the contribution of the Japanese market was the largest, increasing from 7% in the previous year to 12.9%.

The Americas market also maintained a good growth rate of 14.8%.

Although the price of domestic Hermes is 40% higher than that of the euro area,

In 2014, it maintained a two digit growth. However, the Hermes group also clearly saw that the number of Chinese tourists buying luxury goods in Europe has been increasing due to the depreciation of the euro. Not only is Europe, but these consumptive "tourists" have shifted their shopping spree to Japan, South Korea, Singapore and Taiwan.

In terms of product prices, Hermes has said that it will not follow suit in the near future when France's old luxury goods Chanel is on the Chinese market and at the same time raising the price adjustment strategy in the European market.

"At the moment, we do not want to change the price of products. After all, we have a considerable number of customers in the European market. What we need to do this year is to eliminate the impact of exchange rate fluctuations."

Axel Dumas, executive director of Hermes group, said that the possibility of price cuts is not entirely absent.

"We will consider this issue around 2016."

Dumas is also confident of the future development of Hermes, though they have just lowered their 2015 earnings forecast from 10% to 8%.

In 2015, Hermes plans to open three stores, and plans to invest $350 million to refurbish existing stores and expand its product lines. In view of the frustrated watch business last year, Hermes will hope to be placed on the new president of the clock Department Laurent Dordet. The new Slim d series slim watch, which is about to be launched, has won a lot of praise at the recent Basel International Jewellery and watch exhibition.