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Hermès fans, gird your wallets: the brand is about to increase its prices.
On Thursday, the beloved French luxury goods maker announced plans to hike its prices by five to 10 percent in 2023. In an interview with Reuters, Eric du Halgouet, Hermès’s executive vice president, cited increased costs and currency movements as reasons for the move, as well as a sales spike during its third quarter. Hermès devotees may not be surprised: the brand has increased its prices by up to two percent annually in recent years. In 2022, its prices increased by four percent.
“For the moment, we don’t see any sign of slowdown in any of our makers,” says du Halgouet. Famous for its $10,000-plus Birkin and Kelly handbags, Hermès reports that third-quarter sales ending in September came to $3.14 billion euros, or roughly $3.07 billion. The amount puts Hermès sales up by 24.3 percent at constant exchange rates, according to a consensus cited by finance company UBS. It also shows 12 percent growth—double analyst expectations.
Revenues also reportedly grew by 34 percent in Asia, excluding Japan, over the same quarter. China in particular made a strong rebound after new Covid-19 spikes in the country disrupted local businesses in July and August. Hermès has brushed off concerns that the fashion industry’s post-pandemic boom may soon cool off due to a recession, which by definition, the US entered in the summer of 2022, according to Forbes.
As a show of confidence, the French label says it will accelerate its hiring process for the remainder of the year. It hired a whopping 800 workers in the first six months of 2022, and later increased its European employees’ salaries in July to alleviate inflation woes.
Luca Solca, an analyst at research company Bernstein, suggests that “high-end luxury goods demand has yet to normalize.” The top two hottest labels in the world right now, Balenciaga and Gucci, might also agree with that statement.
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