Though many luxury brands are experiencing a slowdown, Hermès has managed to come out on top.
The Parisian purveyor of some of the world’s most coveted designer wares had its sales increase 11.3 percent in Q3, according to its latest earnings report. That same period saw the brand take in $3.99 billion (€3.7 billion) in revenue—an impressive sum at any time, but even more so as the high-end sector is enduring a global sluggishness due to decreased sales from Chinese shoppers, market fatigue, and dramatically increasing prices, Reuters reported.
Demand has only gone up for Hermès’s leather goods, such as the famed Birkin and Kelly handbags, with growth up 17 percent in that sector. As for its ready-to-wear and accessories branch, the maison saw a 15 percent increase in Q3, as well as a 7 percent jump in perfume and beauty. The company has also met the swelling interest from shoppers with additional investment in its supply chain, including the training of 250 new artisans and the opening of its 23rd workshop dedicated to the crafting of leather goods.
Meanwhile, Hermès’s largest competitors in the luxury space, LVMH and Kering, both missed analyst expectations for the third quarter. Kering is introducing multiple cost-cutting measures to buttress against an expected 50 percent decrease in operating revenue for the year, which some tie to recent lackluster showings from the most important member of its portfolio, Gucci. Though less dramatic, LVMH, which once attempted a takeover of Hermès, saw a 5 percent drop in fashion and leather goods sales last quarter, which were originally projected to grow by 4 percent.
But despite its strong performance, Hermès isn’t entirely unaffected by the current downturn in the luxury market. In July, the house saw slightly less traffic in China from the aspirational client, who often purchases the brand’s more affordable silk scarves and other small accessories, according to Reuters.
Only time will tell how the masion—and the rest of the luxury industry—will fair in Q4.
Credit: robbreport.com
