There’s no harm in the air for luxury houses like Hermès. The third quarter saw a spectacular increase in sales, and the manufacturer of the Birkin handbag sees no signs of slowing down.
The Chinese are back
The economic tensions are not yet affecting luxury brands at all. After LVMH, which announced an excellent quarter, Hermès also had an exceptional period. Comparable sales rose by 24% in the last quarter to 3.1 billion euros, whereas analysts were expecting just 15% growth.
Wealthy Chinese consumers have returned, now that health restrictions have largely been lifted. American tourists have also come found their way back to Europe, supported by the strength of the dollar. Indeed, there are no signs of a slowdown anywhere yet, says CFO Eric du Halgouet, according to the Financial Times.
Another 10% more expensive
As a result, Hermès is not hesitating to raise prices once more. Next year, prices at the exclusive leather goods manufacturer will rise by 5 to 10%, after already having increased by 4% this year. Luxury brands raise their prices not only because of inflation, but also to maintain their exclusive image. Although the French brand blames it on rising costs and currency fluctuations.
In the second half of this year, the fashion house plans to hire even more new employees, after 800 additional workers already joined the company in the first semester. In July, all of them also received a pay rise in Europe. The only fly in the ointment is Skechers, which is suing Hermes for allegedly copying the shoe brand’s signature sole.
