H1 2015 Results Roll In For Hermes, LVMH, Kering & Swatch Group


Daniela Aroche | August 04, 2015

Luxury behemoths Hermes, LVMH, Kering and Swatch Group all recently released figures for the first half of 2015 with mixed results and some surprising insights.

Luxury behemoths Hermes, LVMH, Kering and Swatch Group all recently released figures for the first half of 2015 with mixed results and some surprising insights.

Earlier this month, Hermes sent the luxury sphere into a frenzy when it reported a sales rise of 2.3 billion Euros ($2.5 billion) for its first half, despite fears that the China slowdown would take its toll.

The figures for French fashion house, responsible for the iconic Birkin and Kelly bags, were boosted by a 22% sales jump for its second quarter, and while the company would not disclose profit for the period, it stuck to its medium-term sales growth target.

While fellow luxury brands luxury goods brands have been feeling the squeeze – including Burberry, which saw same-store sales contract in Hong Kong after years of double-digit increases – Hermes was buoyed by its thriving business in Japan, where it now operates 17 outlets across various cities.

Japan is rapidly becoming the premium choice for the flock of Chinese shoppers turning their back on Hong Kong, and the region’s pull has also contributed positively to Kering’s latest financials, along with LVMH Moet Hennessy, both of which recently released their first-half results in quick succession.

Hermes Full Results


Kering posted revenue of €5,512.5 million in first-half 2015, up 17% on a reported basis and up 3.5% on a comparable group structure and exchange rate basis.

Exchange rate fluctuations during the six months had a positive impact on revenue and sales growth in mature markets was once again buoyant (up 5.5% based on comparable data), driven by Western Europe and Japan, while sales in emerging markets were stable.

Revenue generated outside the Eurozone accounted for 79% of total consolidated revenue in first-half 2015.

Yves Saint Laurent was one of the brands strongest performers, delivering strong sales growth in all main product categories and across all regions. Specifically, first-half revenue growth rose 38.2% on a reported basis and 24.3% based on comparable figures, with sales picking up pace in the second quarter.

Bottega Veneta also posted first-half revenue growth of 19.7% on a reported basis and of 6.4% based on comparable figures, with sales also improving in the second quarter (up 9.3% on a comparable basis).

Gucci experienced a sharp sales uplift, reporting €5,513 million in first-half revenue, up 17.0% (up 3.5% on a comparable basis).

Again, Japan, played a strong role, with sales in directly operated stores in the region rallying sharply in the second quarter, up 19%.

The boost contributed to the first sales rise for Gucci in almost two years, and prompted a congratulatory remark and a nod to Alessandro Michele’s new creative direction from François-Henri Pinault, Kering’s Chairman & CEO, who commented:

“Kering delivered a sound performance in the first half of 2015, buoyed by strong sales growth in the second quarter in a volatile economic and currency environment. Our integrated, responsive business model enables us to capture growth in the most dynamic markets.

“We are particularly satisfied with the progress at Gucci and the positive reception given to the brand’s new creative direction.”

“ We are particularly satisfied with the progress at Gucci ”

However, Pinault also hinted at changes on the horizon at the luxury brand conglomerate.

“As we enter the second half of the year, I am fully confident in the Group’s ability to combine strict management discipline with organic growth at each of our brands," he said.

It seems the celebrations might be short-lived for Gucci in particular.

Reports confirm that Kering has been demanding lower store charges in Hong Kong and may actually begin to shutter stores there if it doesn’t get its way.

These decisions come as the brand struggles to balance the island city’s waning appeal with wealthy Chinese shoppers since China began taking measures against extravagance among government officials in 2012 – but Gucci is not alone.

According to Kering Chief Financial Officer Jean-Marc Duplaix, the company has also started renegotiating rents in Macau and mainland China as part of a wider plan to contain costs.

Full Results


The Chinese market was tough on fellow luxury giant LVMH Moët Hennessy Louis Vuitton, this year with reports indicating sales declines in Mainland China, Macau and Hong Kong.

These dips, however, were offset by improvements in Europe and United States and, overall, the world’s largest luxury-goods maker reported its strongest earnings increase in three years.

The company recorded revenue of €16.7 billion in the first half of 2015 – an increase of 19% – but it was it’s smallest division, watches and jewelry, that saw the most growth.

In the first half of 2015, the Watches & Jewelry business group recorded organic revenue growth of 10%. On a reported basis, revenue growth was 23% and profit from recurring operations increased by 91%.

Bvlgari was the stand-out – delivering an excellent first half driven by the success of its iconic jewelry lines and its new watch for women, Lvcea, while Hublot showed strong progress.

Meanwhile, TAG Heuer continued to refocus on its core offering and a partnership was concluded between TAG Heuer, Google and Intel for the launch of a smartwatch.

Yet, despite this, the effects of the Chinese crackdown have still been felt, and just yesterday (August 3) it was confirmed that the company will be shutting a TAG Heuer store in Hong Kong as high rental costs and declining numbers of customers weigh on profitability.

As reported by Bloomberg and confirmed by Jean-Claude Biver this week, the brand has decided to close a store on Russell Street, one of the island city’s main shopping thoroughfares.

“Traffic has diminished and rents have stayed high,” he stated.

Full Results


The Swiss-headquartered Swatch Group was also battered by its own market headwinds as a strong franc and negative interest rates pulled its first-half net profit down by nearly 20%.

Weakening interest in Hong Kong also impacted the world’s largest luxury watchmaker, but growth still emerged, albeit slightly muted.

The group’s net sales overall were up 3.6% to CHF 4 248 million at constant exchange rates or 2.2% to CHF 4 192 million at current rates. Calculated in euros, the Group grew by 18.7%.

In the Watches & Jewelry segment, including Production, the Swatch Group grew by 3.4% at constant exchange rates in comparison with the declining export of wrist watches of the Swiss Watch Industry of –1.1% at the end of May.

Group Management said it also expects a strong second half of 2015.

“The outlook for the Group in all regions and segments remains very good. Despite the Swiss franc dilemma, Group Management expects a strong second half 2015.

“Tourism in South Korea will stabilize again after MERS and sales in Greater China and other regions will further increase in local currency. For all brands, this growth will be supported by a high level of marketing investment, an expanded retail network and also by the many new product launches in all segments.”

Full Results

To further investigate conglomerates on Luxury Society, we invite you to explore the related materials as follows:

- H1 2014 Results Are In For LVMH, Kering & Swatch
- 2013: Another Significant Year of Revenues for LVMH, Hermès & Kering
- Little Sign of Slowdown for Luxury’s Big Three

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