Hermès proved to be the most stable and resilient luxury brand during the epidemic. Hong Kong retail was hit by the epidemic and continued to slump. It is still difficult to match the enthusiasm of consumers for Hermès.
According to the Fashion Business Express, Hermes’ store in Hong Kong Harbour City has been refurbished and officially opened on December 7. The store was previously renovated for about a year, and the area after the refurbishment is twice the size of the store before the renovation, covering an area of about 610 square meters.
In addition to handbags, ready-to-wear, shoes and accessories, as well as silk, home, and perfume fragrance products, the store will also sell the brand’s lipstick series launched earlier this year. Hermes has also set up a special fitting room for VIP guests to provide better service.
On the same day, the Hermès Harbour City store first allowed VIP guests to enter the venue and then opened to the public, triggering dozens of consumers to queue up to register for admission. Some local consumers said that after the epidemic, passenger flow has declined, making it easier to buy their favorite Hermes handbags in Hong Kong.
Affected by the epidemic and the continued downturn in the retail environment, Wharf Real Estate’s two core shopping malls, Harbour City and Times Square, saw their revenue plummet 30% and 23% in the first half of this year, respectively. The vacancy rate of Harbour City soared to 10%, a record high. The vacancy rate in Times Square also rose to 8%.
As the most popular high-end shopping mall in mainland China, Harbour City has a compound annual sales growth rate of more than 10% since 2007, and it was as high as 24% in 2018, with sales exceeding HK$100 million per day on average. In the middle of this year, there were more than 20 empty shops on the third floor of the Harbour City Shopping Centre, including watch shops and clothing stores. In order to retain tenants as much as possible, Wharf Real Estate reduced rents to tenants by 50%.
However, some brands still choose to open new stores in Hong Kong against the trend. For example, Foot Locker will open a new flagship store in Mong Kok, Hong Kong in January next year. Harbour City also said recently that it will introduce Alexander McQueen’s largest flagship store in Hong Kong, lululemon’s largest flagship store in Hong Kong, Thom Browne’s first store in Kowloon, Christian Louboutin’s flagship store in Kowloon, and KILIAN PARIS’s flagship store in Hong Kong. During the year, other well-known brands completed renovations or entered Harbour City for the first time. In addition to Hermes, Jimmy Choo’s flagship store will be expanded within this year.
Hermes proved to be the most stable and resilient luxury brand during the epidemic.
In April of this year, the opening of Hermes’ flagship store in TaiKoo Hui in Guangzhou also triggered queues. The store has two floors and was designed by RDAI, a Paris-based architectural firm responsible for the brand’s global boutiques. The overall decoration style incorporates local characteristics of Guangzhou. It is the second largest store in the country, second only to Shanghai Hermes House.
To celebrate the opening of the store, Hermès specially launched a customized version of platinum bags as a window display, and introduced ultra-limited handbags such as rare Himalayan and diamond buckle crocodile, which were all quickly bought. An inside source revealed the store’s sales on Saturday. Up to 19 million yuan, a record high for the first day of opening of new stores nationwide.
In the three months to the end of September, Hermès sales increased by 7% year-on-year to 1.8 billion euros. The decline in revenue in the first nine months narrowed to 14% and recorded 4.288 billion euros, mainly due to mainland China, South Korea and Australia. With the exception of Japan’s strong rebound, the Asia-Pacific market, except Japan, increased by more than 29% in the third quarter. Hermès handbags and harness revenue increased by 7.8%, ready-to-wear and accessories increased by 6.8%, silk and textiles fell by 20.5%, the perfume sector including lipstick fell by 9.9%, and the watch business rose by 12.7%. China’s luxury brands and high-end jewelry are located. Revenue from other businesses achieved a rapid growth of 42%.
Axel Dumas, CEO of Hermès, said that the recovery of performance has made the group full of confidence in its future development. It will continue to increase productivity to meet market demand and accelerate the deployment of the French local supply chain. Hermès currently has 20 leather workshops in France.
Since this year, Hermes’ stock price has risen by about 24% to 829 euros, with a market value of 88.7 billion euros, a record high.