Hermes boosts dividend as luxury industry thrives

A couple walk with Hermes shopping bags as they leave a store in Paris. The luxury goods maker has reported a bumper year, buoyed by demand from China. (REUTERS)
Updated 22 March 2018

Hermes boosts dividend as luxury industry thrives

PARIS: French luxury goods maker Hermes, known for $10,000-plus leather handbags such as the Birkin, rewarded shareholders on Wednesday with a higher dividend and a one-off payout after a bumper year for sales and profits.
The company, originally a saddle and harness maker founded in 1837, joined luxury rivals such as Louis Vuitton-owner LVMH and Gucci-parent Kering in benefiting from a rebound in demand from Asian shoppers in 2017.
Hermes shares rose 3.2 percent in early trade after the firm proposed a dividend of €4.10 ($5.03) per share, up 9 percent on a year earlier, and said it also planned a special dividend of €5 per share.
It last made a one-off payout in 2015.
Hermes also reported a record operating margin for last year, reaching 34.6 percent of sales and helped by high productivity at its workshops and the positive impact of currency hedges in the first half of 2017.
“We had an exceptional year in 2017,” CEO Axel Dumas told a briefing with analysts.
Dumas said that hedging against foreign exchange swings would have a slightly negative effect on margins this year, adding these would likely “normalize.” European-based luxury goods firms are grappling with the effects of a stronger euro.
Stocks of Hermes products ran very low at the end of 2017 as items sold out, a situation that was also atypical and which boosted margins, the company said, without detailing a forecast for 2018.
Hermes’ operating margin was 32.6 percent in 2016.
Sales trends in early 2018 had continued the positive momentum of last year, Dumas added.
Hermes, which has long waiting lists for some of its most coveted handbags, is expanding production to keep up with demand, and plans two more leather goods workshops by 2020 in France.
Like peers, it is looking to boost online sales, though it declined to detail how much revenue came from the web. Hermes is rolling out a revamped version of its website, due shortly in Europe after launching in the US and Canada.
By the end of the year, it also plans to set up its first e-commerce site in China, the biggest market for luxury players. Italy’s Gucci and France’s Louis Vuitton launched web sales platforms in China last year.
Hermes’ 2017 operating income was €1.92 billion ($2.36 billion), up 13 percent from a year earlier and in line with analyst forecasts, while net profit rose 11 percent to €1.22 billion.


Startup of the Week: Wafeer — helping Saudis spend wisely and save money

Updated 28 November 2021

Startup of the Week: Wafeer — helping Saudis spend wisely and save money

JEDDAH: Personal finance app Wafeer is the only service in Saudi Arabia that automatically tracks user’s spending patterns in a bid to help them stick to budgets.
The fintech company was founded by Salah Al-Bassam, Ahmad Ramadan and Abdulaziz Al-Jasser in 2019.
Each founder brings their own skills to the firm — Al-Bassam is an investment professional, Ramadan specialized in tech, while Al-Jasser is an engineer.
“We believe this was the formula that made Wafeer what it is right now, the broad and diverse experience that each founder brings to the table and of course our value add investors,” Al-Bassam told Arab News.
In March, Wafeer raised an undisclosed amount in a pre-seed funding round led by Nama Ventures, with participation from RAI group, WomenSpark, and several angel investors.
At the time, Nama Venture’s general partner Mohammed Alzubi said: “We first met the Wafeer team in August of 2020. The first thing that stood out for us was how complementary was the skillsets of the team, with real role clarity from the get go.”
Al-Bassam explains that its software automatically updates expenses that are paid through the app, rather than needing manual entry.
“Beyond tracking user’s expenses, Wafeer offers personalized advice using artificial intelligence helping users get notified before overspending and gives them recommendations that help cut spending or create wiggle room,” Al-Bassam said.
He added the Saudi Vision 2030 growth initiative highlights the importance of creating more awareness of spending, savings and investment through its Financial Sector Development Program.
Al-Bassam said: “It is one of the Vision's realization programs. This program has several goals, the most important of which are achieving financial diversity, stability, and promoting the culture of saving.
“Our goal at Wafeer is to play a role in achieving these objectives with the aim of answering this ongoing question that arises at the end of each month: What did I spend my salary on?”
Wafeer has 82,000 active users in its platform, who have notched up almost 1 million transactions.
The startup has partnered up with big companies in the region, such as online marketplace Noon and Saudi fast food app Hungerstation to provide special offers to customers.
Al-Bassam said: “We are proud of our partnerships, we have signed a number of strategic partnerships, most recently with Noon and Hungerstation to provide Wafeer users with exclusive discounts and offers that match their spending behavior.”
Wafeer currently only operates in the Kingdom, but has plans to extend its services to other Middle Eastern and North African countries.


Anghami to complete US merger ‘soon,’ CEO says

Updated 26 November 2021

Anghami to complete US merger ‘soon,’ CEO says

  • Maroun said the company’s priority is growth not profitability as it seeks to increase its market share from 6 percent

RIYADH: Lebanon’s Anghami, known as the Spotify of the Arab world, will not postpone its merger with the blank-check company Vistas Media in a potential $90 million deal, according to the firm’s CEO.

Eddie Maroun said the agreement had suffered a delay due to the procedures of the Securities and Exchange Commission in the US, but the deal will still go ahead.

The process is currently in its final stages, and the implementation will be announced very soon, he told Al-Arabiya on Thursday.

Maroun said the company’s priority is growth not profitability as it seeks to increase its market share from 6 percent.

He expects Anghami to achieve profitability within three years, he added.

Subscriptions represent 80 percent of the company’s revenue with the rest coming from advertising, Maround said.

Founded in 2012 in Lebanon, Anghami is the first legal music streaming platform in the Middle East and North Africa region.


Dubai real estate sector deals back to pre-pandemic level: Land department

Updated 26 November 2021

Dubai real estate sector deals back to pre-pandemic level: Land department

  • The number of deals in October was at the highest level since June 2019

RIYADH: Dubai’s real estate market has seen the highest value of deals since March 2019, according to data from the Dubai Land Department.

Figures show that in October, 5,352 transactions worth 13.12 billion UAE dirhams ($3.57 billion) were recorded.

The number of deals was at the highest level since June 2019.

The value of real estate sales transactions in the first 10 months of 2021 are more than the whole of 2020 and the highest since 2015, according to the data.

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Oman’s Bank Nizwa welcomes merger proposal from Sohar International

Updated 26 November 2021

Oman’s Bank Nizwa welcomes merger proposal from Sohar International

RIYADH: Oman-based Sohar International Bank and Bank Nizwa are considering a merger, according to Al-Arabiya.

Bank Nizwa’s board welcomed the proposal from Sohar International on Nov. 25 to study the idea of merging the two banks, it was reported.

Bank Nizwa recorded profit growth of 14 percent in the third quarter to 3 million Omani riyals ($7.7 million).

Profit growth of Bank Nizwa increased by 6 percent in the first nine months of 2021 to 9 million riyals.

Bank Nizwa is Oman’s first dedicated Islamic bank, launching in January 2013, with fully Shariah-compliant products and services.


Foxconn’s Jusda unit seeks pre-IPO financing

Updated 26 November 2021

Foxconn’s Jusda unit seeks pre-IPO financing

  • Foxconn’s supply chain management platform seeks $300 million to $400 million

RIYADH: Foxconn’s Jusda unit is considering raising funds from private investors ahead of a potential initial public offering early next year, sources told Bloomberg.

Foxconn’s supply chain management platform seeks to raise $300 million to $400 million in the so-called pre-IPO round, the sources said.

The company will use the proceeds to expand logistics services, they said.

Jusda is also in the early stages of evaluating a potential listing in Hong Kong in the second half of next year, the sources added.

No final decision has been taken because the considerations are preliminary and details such as the size of the funding can still be changed, they said.

Foxconn spokesman Jimmy Huang said Jusda has no plan for an IPO right now, and declined to comment on the fundraising.

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