Hermes Group sees annual sales soar 17%

Companies operating under the Hermes umbrella significantly increased turnover during 2010 – with Group sales up 17%. Overall sales increased to EUR 1.72bn, in comparison to EUR 1.47bn recorded for the previous financial year.

“Hermes has successfully positioned itself on the global market as an integrated provider of retail-related services. Increasing numbers of international distance sellers trust us to handle essential parts of their value chain,” said Hanjo Schneider, CEO Hermes Europe and Member of the Executive Board of the Otto with responsibility for the Services Segment (pictured).

“Retailers who choose Hermes as a partner can concentrate entirely on their core business, updating their product line and sales. Our professionally specialised companies will take care of everything else,” he added.

The outlook for the current financial year is also encouraging. With its current alignment, all business sectors of the Hermes Group stand to profit from further expansions in e-commerce, rendering corporate services for companies using the Internet as a sales channel.

The German E-Commerce and Distance Selling Trade Association is forecasting a further increase in online sales of 15.5% for Germany in 2011 to bring it up to EUR 21.1bn. This rapid growth is also shaping the growing European parcel business.

“We aren’t simply relying on the continued growth of online sales and the resulting contracts. We are increasingly shaping the e-commerce business ourselves by developing new products, brands and services especially for Internet retail and dovetailing this approach with over-the-counter retail,” explained Schneider.

With sales of EUR 303.8m in 2010, the Hermes Logistik Gruppe Deutschland (HLGD) transported 14% more shipments in a year-on-year comparison (prior year: EUR 266m). By doing so, it posted considerable growth in volume for the seventh year in a row, nearly twice as high as that for the courier-express-parcel segment as a whole (7.1%).

In Germany, Hermes will invest EUR 120m in the construction of 18 new depots. The materials handling technology installed in the new sites will enable 4,500 shipments per hour to be processed on average. This corresponds to an increase in capacity of around 200% compared to performance levels achieved in the old buildings.

Significant growth was also recorded by Hermes Einrichtungs Service in the area of furniture and bulky item deliveries. Across Germany, nearly 20% more shipments were effected than in 2009 (2.5m), with over 3m furniture items and electrical and household appliances delivered. As the “market leader” in the ‘2-man delivery’ sector, HES was responsible for the delivery of every second furniture item or household appliance to its final recipient within Germany.

In Britain, Hermes UK increased shipment volumes by around 8% to 115.5m from 107.2m in the prior year. In so doing, the company established itself as the country’s second largest end-customer parcel delivery service.

Hermes UK’s customers include Tesco, the UK’s largest supermarket chain, the department store chain, Debenhams, and the leading fashion chain, Next. At the end of 2011, Hermes will begin to set up a country-wide parcel shop network in the UK in cooperation with private retailers in an organisation similar to the German network.

After the successful pilot project in Moscow, a further 400 shops are planned for the coming months in Russia. Alongside Moscow, delivery services could then also be provided under Hermes’ umbrella in the large cities of St. Petersburg, Nishnji Nowgorod, Samara, Yekaterinenburg and Nowosibirsk. According to datainsight, the Moscow market research bureau, around 61.9m Russians, roughly 44% of the total population, will be using the Internet by 2013. Already, the world’s largest country by surface area is an attractive market for distance selling, with the Otto Group looking to develop operations still further from its leading market position.

Hermes Fulfilment GmbH (HF) achieved a significant increase in its web-based services by founding of two companies specialised in interactive business and the control of multichannel sales.

In cooperation with Meyer & Meyer, the joint venture ADD/UP Connected Channels was founded with the aim of linking together distance selling and over-the-counter retail for European consumer goods retailers and markets.

Hermes NexTec, also founded in 2010, made its debut as a service provider for the Internet fashion and lifestyle markets. The company has its own independent IT environment, and can offer market-compliant and high-performance web-based operations using the tried-and-tested ‘Columbus’ shop solution.

During the current financial year, Hermes Transport Logistics GmbH (HTL) is planning to expand its network of air and sea freight connections by adding the key area of intercontinental procurement logistics. The European LTL (Less than Truck Load) and FTL (Full-Truck-Load) business will also be consistently expanded to include new destinations. Within Germany, further opportunities for integrated goods transport by road and rail will also be developed.

Hermes Otto International also chalked up further sales growth in 2010. The company, which sources textile, furniture and lifestyle products, saw sales of US$2.5bn, primarily in Asia.

HermesHansecontrol Group, which officially came under the Hermes brand name at the start of May 2011, is also looking to expand its range of approved testing and consultancy services. The goal is to acquire even more customers who want their quality testing carried out for them, for example in the quality control laboratory in Dongguan, China, launched in 2010. The tests, which are carried out close to the Asian production sites, reduce the risk of expensive recall campaigns should articles have to be withdrawn from Europe due to non-compliance with industry and safety standards. Over 70% of goods tested today by HermesHansecontrol already originate from outside the Otto Group.

In terms of outlook, Schneider concluded: “Hermes is optimally positioned to pursue its ambitious growth course during the coming years and thus enhance the market position it has already achieved. To do this we shall continue with the globalisation of our service provision and push ahead with the development of services so that distance sellers always have first class solutions available to enable them to dovetail their various sales channels.”