How Hermes Survived COVID-19 and Recovered So Quickly?

Yitong Wu ()
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Yitong Wu: Shanghai University of Finance and Economics

A chapter in Proceedings of the 2022 2nd International Conference on Financial Management and Economic Transition (FMET 2022), 2023, pp 705-716 from Springer

Abstract: Abstract The COVID-19 outbreak has had a huge impact on the global economy, particularly the retail sector, and Hermes is no exception. However, not only did Hermes manage to avoid heavy losses during the worst of the pandemic, its performance has also exploded in the post-COVID-19 era. This paper attempts to find the reasons for Hermes’ successful response to the epidemic and rapid recovery through horizontal and vertical financial statement analysis, observation of Hermes’ strategic changes and evaluation of external macro factors. The reasons can be summarized as follows: (1) Hermes has high operational efficiency; (2) Low leverage risk; (3) Online channel development; (4) Vigorously layout the Asian market; (5) Value-preserving attribute can cope with inflation. When it comes to the future revenue forecast, it can be predicted that there are several factors supporting Hermes’s revenue growth going forward, but China market is the most uncertain factor for performance growth.

Keywords: Luxury goods; Covid-19; Inflation; Financial statements (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-054-1_77

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DOI: 10.2991/978-94-6463-054-1_77

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